10 Things You Need To Know: December 13, 2022
Key data releases this week include: NFIB Small Business Optimism (Tue), CPI (Tue), FOMC rate decision (Wed), retail sales (Thu), and industrial production (Thu).
Haver
December 12, 2022
The Producer Price Index for Final Demand increased 0.3% during November, the same as in the prior two months. During the last 12 months, the PPI increase moderated to 7.4% from an 11.7% March peak. A 0.3% November rise had been expected in the Action Economics Forecast Survey. The PPI excluding just food & energy rose 0.5% last month. A 0.2% increase had been expected.
Haver
December 9, 2022
The National Association of Realtors’ Fixed Rate Mortgage Housing Affordability Index fell 5.6% m/m to 91.2 in October after a 6.9% drop to 96.6 in September. The October reading was the second consecutive m/m fall to the lowest level since August 1985. The HAI slid 36.4% y/y in October, the deepest slide on record, after a 34.2% decrease in September.
Haver
December 7, 2022
Nonfarm business sector productivity improved 0.8% (-1.3% y/y) during Q3, revised from 0.3%, following unrevised declines of 4.1% and 5.9% in the prior two quarters. A 0.6% rise was expected in the Action Economics Forecast Survey. The y/y decline remained the third consecutive shortfall, the first such performance since 1982.
Bloomberg
December 8, 2022
The euro-area economy expanded by more than initially thought in the third quarter, though a recession triggered by the continent’s energy crisis is likely to have begun since. Gross domestic product rose by 0.3% in the three months through September, slightly more than the 0.2% preliminary estimate, according to data released Wednesday by Eurostat.
Barron’s
December 12, 2022
Those tempted to hide out in cash until the market recovers should heed this finding from JPMorgan Asset Management: Over a 20-year period, missing the 10 best days results in annualized returns that are roughly half of what you would have gotten if you stayed invested.
Barron’s
December 12, 2022
Larry Summers, the former Treasury secretary, warns that with an economic downturn all but inevitable, there’s “significant risk” that the Fed will cut interest rates even before inflation falls back to its 2% target. While that could help the economy in the near term, it could also backfire by requiring a second, possibly more damaging, round of rate increases shortly thereafter. The result could be something akin to former Fed Chairman Paul Volcker’s experience in the early 1980s.
Bloomberg
December 12, 2022
US household expectations for inflation in the year ahead fell last month to the lowest level since August 2021, according to a Federal Reserve Bank of New York survey. Households in November said they expected inflation to be 5.2% over the coming 12 months, down from 5.7% the month before. Expected inflation three years and five years ahead also fell.
The Wall Street Journal
December 11, 2022
The Federal Reserve, Bank of England, and European Central Bank each have policy meetings this week, with the Fed expected to begin slowing the pace of its interest rate hikes while the other two central banks continue with more aggressive increases. The divergence could have ramifications across global markets and potentially reverse some of this year’s key market dynamics, particularly those stemming from the dollar’s persistent strength.
ThinkAdvisor, InvestmentNews
December 5, 2022
Anxiety is high for many investors, with a Nationwide Retirement Institute survey finding that 51% of people who have yet to retire are “terrified” about their long-term prospects and what will happen after they leave the workforce. However, less than a quarter of advisers surveyed described their pre- and recently retired clients as “very anxious.”