Weekly Economic Update for December 17, 2012

December 20, 2012  |   News

Weekly Economic Update for December 17, 2012

With gasoline costs falling 7.4% in November and energy costs dipping 4.1% on the whole, it is hardly a surprise that the federal government’s Consumer Price Index fell 0.3% last month – its first decline since May. Core consumer prices rose 0.1%. The Producer Price Index also retreated 0.8% in November. In the past 12 months, America has seen 1.8% overall consumer inflation and 1.5% overall wholesale inflation. In AAA’s December 13 survey, unleaded gasoline was averaging $3.29 per gallon nationally – down 68¢ from its 2012 peak.1,2

In a remarkably specific policy announcement, the Federal Reserve’s Open Market Committee said that the central bank would keep interest rates at historic lows “at least as long” as unemployment exceeds 6.5% and inflation is projected at 2.5% or less. If the jobless rate continues to fall as it has since July, the Fed could end up adjusting rates prior to 2015. The central bank also said it will buy more debt – it will purchase $45 billion of Treasury bonds per month starting in January.1,3,4,5

November’s increase was a nice rebound from the 0.3% slip the Commerce Department had reported for October. Economists surveyed by Bloomberg had projected a November gain of 0.5%, however.5

Major stock indices declined last week as follows: S&P 500, -0.32% to 1,413.58; NASDAQ, -0.23% to 2,971.33; DJIA, -0.15% to 13,135.01. While President Obama and House Speaker John Boehner met privately last Thursday, there was no sign of a fiscal cliff deal emerging in the nation’s capital. Oil settled Friday at $86.73, and gold settled Friday at $1,697.00.6,7,8

THIS WEEK: No major U.S. economic releases are scheduled to come out on Monday. Tuesday, a new NAHB Housing Market Index arrives and Oracle offers a new earnings report. Wednesday, we learn about November housing starts and FedEx, Bed Bath & Beyond, Accenture and General Mills come out with earnings. Thursday, the final estimate of Q3 GDP, November existing home sales numbers, the Conference Board index of leading indicators and weekly jobless claims figures complement earnings from Nike, Micron, ConAgra, CarMax, Darden Restaurants, Discover Financial, Rite Aid and RIM. Friday brings the final University of Michigan consumer sentiment survey for December and reports on durable goods orders and consumer spending for November.

Sources: usatoday.com, cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 12/14/126,7,8,10,11,12
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

1 – www.bloomberg.com/news/2012-12-14/consumer-prices-in-u-s-decline-more-than-forecast-in-november.html [12/14/12]
2 – www.businessweek.com/news/2012-12-13/wholesale-prices-in-u-dot-s-dot-fell-more-than-forecast-in-november [12/13/12]
3 – www.cnbc.com/id/100311233 [12/13/12] 
4 – www.federalreserve.gov/newsevents/press/monetary/20121212a.htm [12/12/12]
5 – www.bloomberg.com/news/2012-12-13/retail-sales-increase-as-americans-snap-up-autos-electronics.html [12/13/12]
6 – www.usatoday.com/money/markets/overview/ [12/14/12]
7 – www.cnbc.com/id/100315158 [12/14/12]
8 – online.wsj.com/mdc/page/marketsdata.html [12/14/12]
9 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [12/14/12]
10 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F14%2F11&x=0&y=0 [12/14/12]
10 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F14%2F11&x=0&y=0 [12/14/12]
10 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F14%2F11&x=0&y=0 [12/14/12]
10 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F14%2F07&x=0&y=0 [12/14/12]
10 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F14%2F07&x=0&y=0 [12/14/12]
10 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F14%2F07&x=0&y=0 [12/14/12]
10 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F13%2F02&x=0&y=0 [12/14/12]
10 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F13%2F02&x=0&y=0 [12/14/12]
10 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F13%2F02&x=0&y=0 [12/14/12]
11 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/14/12]
11 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/14/12]
12 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]


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