Weekly Economic Update for October 1, 2012

October 02, 2012  |   News

October 1, 2012

While the 0.5% August gain in consumer spending was the biggest in six months, it was mostly attributable to retail gas prices rising $0.28 for the month. The Commerce Department also noted a 0.3% drop in inflation-adjusted personal income in August, an occurrence unseen since November. Consumer spending on non-durable goods rose 1.7% in a month also marked by a 13.0% drop in durable goods orders – the biggest decrease in those bookings since January 2009, though core hard goods orders rose 1.1% last month.1,2

The Conference Board’s monthly consumer confidence gauge jumped to 70.3 in September from its revised 61.3 mark in August. Economists polled by MarketWatch thought it would come in at 65.0; instead, it reached a 7-month high. The University of Michigan’s final September consumer sentiment survey hit a 4-month peak of 78.3, a 4.0% improvement from August.1,3

The 1.2% annualized index gain in the S&P/Case-Shiller Home Price Index for July was the largest since August 2010. While new home sales fell 0.3% in August, the Census Bureau noted a 27.7% yearly gain in the category. At $256,900, the median new home price also hit its highest level since March 2007. Pending home sales slipped 2.6% in August, the National Association of Realtors stated.2,4,5

Last week, the Dow lost 1.05%, the NASDAQ lost 2.00% and the S&P 500 lost 1.33%. All of this aside, the Q3 performance of the major indices was terrific: Dow, +4.32% to 13,437.13; NASDAQ, +6.17% to 3,116.23; S&P, +5.76% to 1,440.67; Russell 2000, +4.88% to 837.45. The CBOE VIX fell 8.61% in the quarter. The launch of QE3 helped make September the third-best month for stocks (so far) in 2012. Oil ended the quarter at $92.01 a barrel, gold at $1,771.10 an ounce.6,7,8

THIS WEEK: The Institute for Supply Management’s September manufacturing PMI comes out on Monday; also, Ben Bernanke speaks about Federal Reserve policy in Indianapolis. Tuesday brings monthly auto sales figures from the Commerce Department. ISM’s September service sector PMI appears on Wednesday, plus earnings from Monsanto, Marriott and Family Dollar. The September FOMC minutes are published Thursday, along with new weekly jobless claims figures, the Challenger job-cut report for September and a report on August factory orders. The Labor Department will issue the September jobs report on Friday.
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 9/28/126,9,10,11
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1 – www.cnbc.com/id/49212032 [9/28/12]
2 – www.businessweek.com/news/2012-09-27/pending-sales-of-existing-homes-in-u-dot-s-dot-fell-2-dot-6-percent-in-august [9/27/12]
3 – articles.marketwatch.com/2012-09-25/economy/34071953_1_lynn-franco-confidence-readings-consumer-sentiment [9/25/12]
4 – www.sfgate.com/business/article/Case-Shiller-index-Home-values-climbing-3894161.php [9/25/12]
5 – www.lvrj.com/business/ap-photo-nybz130-171418791.html [9/26/12]
6 – www.cnbc.com/id/49210305 [9/28/12]
7 – www.cnbc.com/id/15839285 [9/28/12]
8 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [9/28/12]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F28%2F11&x=0&y=0 [9/28/12]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F28%2F11&x=0&y=0 [9/28/12]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F28%2F11&x=0&y=0 [9/28/12]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F28%2F07&x=0&y=0 [9/28/12]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F28%2F07&x=0&y=0 [9/28/12]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F28%2F07&x=0&y=0 [9/28/12]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F27%2F02&x=0&y=0 [9/28/12]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F27%2F02&x=0&y=0 [9/28/12]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F27%2F02&x=0&y=0 [9/28/12]
10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/28/12]
10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/28/12]
11 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]



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