Weekly Economic Update for October 29, 2012

October 29, 2012  |   News

October 29, 2012

The Commerce Department’s initial third quarter estimate of annualized growth – 2.0% – was better than expected. Still, it fell short of the 2.5% pace analysts feel is needed to reduce the unemployment rate. Consumer spending, defense spending and residential real estate investment were the key factors behind the third quarter improvement – in fact, spending on homebuilding and home improvement rose more than 14% in the quarter.1,2

September saw a 5.7% rise in new home buying, according to the Census Bureau. The annual projection of new home sales (389,000) paled in comparison to the 800,000+ pace of early 2007, but sales were still up 27.1% year-over-year to the highest level since April 2010. Elsewhere in the housing market, the National Association of Realtors reported an 0.3% gain in pending home sales last month.3,4

October’s final Thomson Reuters/University of Michigan consumer sentiment index came in at 82.6, the best monthly reading since September 2007. Across 2003-2007, the index averaged 89.0; during the last recession, it averaged 64.2.5

October may go in the books as the poorest month for stocks in some time. As of Friday’s close, the S&P 500 was down 1.99% for the month. Major indices turned south last week – S&P 500, -1.48% to 1,411.94; NASDAQ, -0.59% to 2,987.95; DJIA, -1.77% to 13,107.21. Gas prices also dropped, however: AAA had the national average price per gallon at $3.58 Friday, down 3.8% for the week and 5.6% this month.1,6,7

THIS WEEK: September’s consumer spending report arrives Monday, along with earnings from Burger King and Baidu. Tuesday sees the release of a new Case-Shiller Home Price Index, the Conference Board’s October consumer confidence survey and Q3 earnings from BP, Pfizer, UBS, U.S. Steel, Valero Energy, Sirius XM, Take Two, Ford, Electronic Arts, Dreamworks and Shutterfly. On Wednesday, MetLife, GM, Time Warner Cable, Visa, Arcelor Mittal, GlaxoSmithKline, MasterCard, Allstate, Barclays, Clorox and Ralph Lauren report earnings. ISM’s October manufacturing index comes out Thursday in addition to new initial claims figures and Q3 results from Starbucks, ExxonMobil, Royal Dutch Shell, Cigna, Kellogg, AIG, Chesapeake Energy, Hartford Financial, Open Table, WebMD and Yelp. Friday sees the release of the October jobs report, the numbers on September factory orders and Q3 results from Chevron.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 10/26/127,8,9,10

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1 – money.msn.com/market-news/post.aspx?post=8b58846a-7feb-420a-9551-e2324bbc9bc6 [10/26/12]
2 – www.suntimes.com/business/15973988-420/us-economy-accelerates-to-2-percent-growth-in-third-quarter.html [10/26/12]
3 – blogs.wsj.com/economics/2012/10/25/vital-signs-chart-new-home-sales/ [10/25/12]
4 – www.reuters.com/article/2012/10/25/usa-economy-homes-idUSL1E8LP59420121025 [10/25/12]
5 – www.bloomberg.com/news/2012-10-26/michigan-consumer-sentiment-index-increased-to-82-6-in-october.html [10/26/12]
6 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [10/26/12]
7 – www.cnbc.com/id/49567684 [10/26/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F26%2F11&x=0&y=0 [10/26/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F26%2F11&x=0&y=0 [10/26/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F26%2F11&x=0&y=0 [10/26/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F26%2F07&x=0&y=0 [10/26/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F26%2F07&x=0&y=0 [10/26/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F26%2F07&x=0&y=0 [10/26/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F25%2F02&x=0&y=0 [10/26/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F25%2F02&x=0&y=0 [10/26/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F25%2F02&x=0&y=0 [10/26/12]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/26/12]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/26/12]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]



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