10 Things You Need to Know: December 12, 2023
Key data releases this week include: NFIB Small Business Optimism (Tue), CPI (Tue), PPI (Wed), FOMC rate decision (Wed), retail sales (Thu), and industrial production (Fri).
Haver
December 8, 2023
Nonfarm payrolls increased 199,000 (1.8% y/y) after rising an unrevised 150,000 in October and 262,000 in September. So far this year, payrolls have risen an average 232,000 per month after an average 399,000 in 2022. The latest increase compared to expectations for a 190,000 gain in the Action Economics Forecast Survey. Average hourly earnings rose 0.4% in November.
Haver
December 5, 2023
The U.S. ISM Services PMI rose to 52.7 in November after declining to 51.8 in October, according to today’s report by the Institute for Supply Management, indicating expansion for the 11th straight month at a faster pace. The November reading, while up from a low of 49.2 in December 2022. The Action Economics Forecast Survey had expected 52.2 for November.
Bloomberg
December 8, 2023
The University of Michigan’s consumer sentiment index jumped 8.1 points to a four-month high of 69.4. The median estimate of economists called for the gauge to edge up to 62. Consumers see prices rising at an annual rate of 3.1% over the coming year. They see costs rising 2.8% over the next five to 10 years, down from last month’s 3.2%.
Bloomberg
December 11, 2023
Analysts are expecting the eurozone economy to have contracted by 0.1% in the fourth quarter, having previously expected no change. The contraction would mark the eurozone’s first recession since the pandemic. The weakness is primarily led by Germany, which is struggling with a budget crisis and weak demand. A slow recovery is expected in early 2024, while the European Commission expects the bloc to return to growth this quarter.
Capital Economics
December 6, 2023
China’s economy has regained some strength recently. We expect this to continue into 2024, on the back of support from fiscal policy and a further pick-up in household spending. But with property construction likely to continue to decline and exports set to do the same, the recovery will lack momentum. Growth will have dropped below 4% by the end of the year.
Barron’s
December 11, 2023
While recession fears are heating up again, real gross domestic product just needs to grow in the low-single digits for the current 2024 S&P 500 sales growth estimate of 5% to look reasonable. Couple that with a moderating increase in costs such as materials and pay, and margins would rise, while stock buybacks would help send earnings up by the estimated 12%, to $244 next year.
Oxford Economics
December 10, 2023
We expect the Fed’s updated summary of economic projections and the post- meeting press conference to push back against the idea that rate cuts could come onto the agenda anytime soon. If anything, we expect policymakers to err on the side of leaving rates too high for too long.
Capital Economics
December 6, 2023
As core inflation is on track to return to the 2% target by the middle of next year, we expect the Fed to cut interest rates by 25bp at every meeting next year from March onwards, with rates eventually falling to between 3.00% and 3.25% in early 2025. We expect the economy to narrowly avoid a recession, and rate cuts should fuel a pick-up in GDP growth starting in the second half of next year.
Bloomberg
December 12, 2023
The amount of maturing US corporate debt is set to double in the next two years, to about $1 trillion in 2025, and triple in the euro zone, to the equivalent of more than $400 billion.