Since you didn’t eat your fruitcake celebrating last week’s National Fruitcake Day, it’s time to toss it. It was gross to begin with. A week later, it’s grosser than gross.
Another holiday week passed with inconsistent economic news. Neither Monday nor especially Thursday gave us anything worth while.
On Tuesday, the S&P/Case-Shiller October 20-City Home Price Index showed property prices rose 0.8 percent, the fastest month-over-month gain since March and our waistlines since Thanksgiving. On a year-over-year basis, home prices were up 4.5 percent, the smallest year-over-year gain in two years.YOY gains were led by Miami (+9.5 percent) and San Francisco (+9.1 percent). Cleveland apparently didn’t rock in October and had the lowest rise (+0.9 percent).
Also, on Tuesday, came the Conference Board’s December Consumer Confidence Index, which climbed to 92.6 from November’s upwardly revised 91.0. The index’s current conditions component spiked like a plunging polar bear’s heart on New Year’s Day. It increased 5.1 points, with the jobs-hard-to-get component being especially strong. The future expectations component was less so, with a 0.8 percent loss to 88.5.
Middle America may feel the economic love, but feel they won’t feel that way for long. Especially concerning in the Consumer Confidence report was a sizable decline in those who expect to buy a house within the next six months. We’ll touch more on housing later.
Finally, on Tuesday, came State Street’s December Investor Confidence Index, which measures institutional investor’s confidence in 45 countries based on the changing positions in institutional investor’s equity holdings. While sentiment remained strong, it dropped to 112.1 from November’s downwardly revised 113.7. The drag came from uncertainty in the oil markets, deflation concerns in Europe and a possible Greek default. Investors should heed these concerns and ensure their portfolios are properly balanced according to their risk tolerance, investment objectives and time horizon.
Wednesday brought us the National Association of Realtors’ November Pending Home Sales Index. Contrary to typical holiday seasonal trends, it showed that home sales increased 0.8 percent from November’s 1.1 percent drop. While recent housing data has shown improvements, it may remain a buyer’s market for some time to come. At least in Denver, properly priced houses are flying off the shelves (yard?). Only buy a home when you can put at least 20 percent down on a house no more than three times your income.
On Friday, the Institute of Supply Management’s (ISM) December Manufacturing Index was released. As frightening as seeing Matt Lauer in his boxer shorts, it showed a 3.2 percent drop to 55.5 from November’s 58.7. This index was outperforming other manufacturing measures recently and December’s drop was more significant than economists expected. Growth in the new orders component led the fall, with backlog accumulation and production also a drag.
The ISM’s employment component was the bright spot in the report and rising manufacturing employment has been a bright spot in hiring overall. Of course, employment will drop if the other components continue to do so.
In our humble opinion, American’s rightfully feel good about today’s economy and rightfully concerned about tomorrow’s. Most signs support improving economic sentiment, but concerns still remain with most concerns outside the U.S. Pay off debt, save and invest. That’s our three-pronged strategy in this economy.
For help paying off debt, buy our book, 4: The Four Principles of a Debt Free Life, just released yesterday. It’s an entertaining guide to how yours truly paid off over $51,000 worth of credit card debt. These four principles helped us. They’ll help you.
That’s this week’s #MoneyConscious Mash Up. Come back next week at the same #MoneyConscious time on the same #MoneyConscious station to learn all you need to know about the week’s economic news.