Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)If the GDP price deflator came in as expected at 2.7% instead of coming in at 3.5%, real GDP in Q3 would have been 5.7% instead of 4.9%, though still above the estimate of 4.5%. Personal spending added 270 percentage points to the increase and that is what led the growth. Specifically, this spending was mostly focused on services and less so on goods. A jump in inventories also boosted growth by 132 percentage points. There was very little economic contribution from other components of gross private investment. Residential construction added 15 bps, IP spending added 14 bps, spending on equipment took off 19 bps and spending on commercial structures was about flat. Net trade was a push as the lift from exports was offset by the drag from imports. Government spending added 80 bps.

2)There was a .7% increase in nominal spending in September. Spending on services were higher by .8% m/o/m and by .7% for goods driven by a 1% rise in durable goods, most likely led by vehicles.

3)Off the lowest level in almost 23 yrs of data that the NAR has, pending home sales in September rose 1.1% m/o/m, better than the expected drop of 2% but follows a 7.1% decline in August. From the NAR as the bottom line, with the "highest mortgage rate in 20 years" while "inventory remains tight", the end result "hinders sales but keeps home prices elevated."

4)September new home sales totaled 759k, well above the estimate of 680k and up from 676k in August.

5)The October S&P Global US manufacturing and services composite PMI rose to 51 from 50.2 in the two prior months and vs 52 in July. Services rose a touch to 50.9 from 50.1 while manufacturing was up a smidge but back to 50 exactly from 49.8. The bottom line from S&P Global, “Hopes of a soft landing for the US economy will be encouraged by the improved situation seen in October…Sentiment has improved in part due to hopes of interest rates having peaked.”