Q3 GDP got a big boost from the later revisions and Q4 is expected to fall back to 3.0% from the 5.0% in Q3.

While jobs have been steady there were signs of a late slowdown in other areas.

On the consumer front sales were anything but exciting. Oct and Nov saw sales increase but it lost ground in December. Expectations though have been rising but that needs to be turned into something tangible.

Retail sales advance

  • Oct 0.3% vs -0.3% prior
  • Nov 0.7%
  • Dec -0.9%

Sales ex-auto took a big dive in Dec, down 1.0% from +0.5%

Spending still remained weak while income was still pretty flat

  • Spending Oct 0.2% vs -0.2% prior. Income 0.2% unch
  • Nov 0.2%. Income 0.4%
  • Dec unreleased

Michigan consumer sentiment

  • Oct 86.9 vs 86.4 prior
  • Nov 88.8
  • Dec 93.6

The housing market was pretty steady with only permits showing something to be cautious of

  • Oct starts -2.8% vs +6.3% prior. Permits 4.8% vs 1.5% prior
  • Nov -1.6%. Permits -5.2%
  • Dec +4.4% Permits -1.9%

New home sales were also steady

  • Oct 0.7% vs 0.2% prior
  • Nov -1.6%
  • Dec 11.6%

In industrials, durables goods have been awful;

  • Oct 0.4% vs -1.3% prior
  • Nov -0.7%
  • Dec -3.4%

Factory orders have been equally poor;

  • Oct -0.6% vs -10.1% prior
  • Nov -0.7%
  • Dec unreleased

Industrial production saw a one off spike in Nov before returning to form;

  • Oct -0.1% 1.0% prior
  • Nov +1.3%
  • Dec -0.1%

In manufacturing the numbers were still in expansion but falling

Markit

  • Oct 55.9 vs 57.5 prior
  • Nov 54.8
  • Dec 53.9

ISM

  • Oct 59.0 vs 56.6 prior
  • Nov 58.7
  • Dec 55.5

Chicago

  • Oct 66.2 vs 60.5
  • Nov 60.8
  • Dec 58.3

Empire

  • Oct 6.17 vs 27.54 prior
  • Nov 10.16
  • Dec -3.58

Philly Fed

  • Oct 20.7 vs 22.5 prior
  • Nov 40.8
  • Dec 24.5

The leading index pretty much sums things up

  • Oct 0.9% vs 0.8% prior
  • Nov 0.6%
  • Dec 0.5%

It hasn’t been a good quarter for trade and imports & exports

  • Oct imports +0.7% vs 0.0% prior. Exports 1.6% vs -1.8% prior
  • Nov -2.2%. Exports -1.0%
  • Dec unreleased

So overall it looks to be a story of growth falling back slightly in Q4 and no real increase in consumer activity but higher expectations going forward. There’s certainly no oil price boost coming into the numbers yet and that still may take some time. This is just a snapshot of the economy and the expected 3.0% is probably a fair analysis. Any lower and the buck will get worried, any higher and a dollar rally will need to break the big topside levels around 119.70 and 120.00 to see a lasting move north.

Unless the numbers really show a big upward surprise, I don’t think there will be much for the hawks in this report