Consumers continued shopping in October, while inflation ticked up. Here are the five things we learned from U.S. economic data released during the week ending November 29.
Consumer spending increased slightly in October. The Bureau of Economic Analysis (BEA) reports real Personal Consumption Expenditures (PCE) advanced a seasonally adjusted 0.1 percent, well below its September 0.5 percent gain. Spending on goods held steady, split between a 0.3 percent increase for durables and nondurables’ 0.1 percent drop. Services expenditures rose 0.2 percent. Nominal PCE grew 0.4 percent, funded by a 0.6 percent gain in nominal personal income and a 0.7 percent surge in nominal disposable income. With inflation adjustments, real disposable income rose 0.4 percent. The savings rate increased by 0.3 percentage points to +4.4 percent. Real PCE has grown 3.0 percent over the past year with real disposable income up 2.7 percent over the same 12 months. The Federal Reserve’s preferred inflation measure—the PCE Price Index—increased 0.2 percent in October and 2.3 percent over the past year. Removing food and energy, core PCE jumped 0.3 percent for the month and 2.8 percent over the past 12 months.
The U.S. economic growth was solid, but corporate profits fell in Q3. Real Gross Domestic Product (GDP) expanded at a seasonally adjusted annualized rate (SAAR) of +2.8 percent. This was the Bureau of Economic Analysis’s second estimate of Q3 GDP, with the previous report showing the same growth rate. The most significant contributors to Q3 GDP growth were personal consumption and government expenditures, while net exports and a private accumulation of inventories were the biggest drags. Corporate profits slipped 0.3 percent to $3.807 trillion (SAAR). Despite the decline, corporate profits were 6.1 percent ahead of its year-ago pace. The BEA will revise its Q3 GDP and corporate profits estimates again in late December.
Economic growth slowed in October. The Chicago Fed National Activity Index (CFNAI) fell by 13 basis points to -0.40. A reading between -0.70 and zero indicates a U.S. economy expanding below its historical average. Only 30 of 85 CFNAI components positively contributed to the index, whereas the other 55 measures dragged down the measure. All four component categories negatively contributed to the CFNAI: production (-0.25), sales/orders/inventories (-0.02), employment (-0.01), and personal consumption/housing (-0.01). The CFNAI’s three-month moving average lost three basis points to -0.03. The moving average has been negative for 12 straight months.
Durable goods orders inched up in October. New orders for durable manufactured goods grew 0.2 percent to a seasonally adjusted $286.6 billion. Year-to-date, the Census Bureau measure was off 0.8 percent from the comparable 2023 months to $2.825 trillion. Transportation goods orders increased 0.5 percent (with civilian aircraft orders up 8.3 percent). Net of transportation goods, orders eked out a 0.1 percent increase. Orders increased for electrical equipment/appliances (+1.3 percent), machinery (+0.3 percent), and fabricated metals (+0.1 percent) but fell for primary metals (-0.7 percent) and computers/electronics (-0.1 percent). Durable goods shipments fell 0.6 percent to $285.2 billion. Year-to-date, durable goods shipments were up 1.8 percent versus 2023 to $2.873 trillion.
The Conference Board’s consumer sentiment measure brightened in November. The Conference Board’s Consumer Confidence Index added 2.1 points to a seasonally adjusted 109.6 (1985=100). The same measure was at 101.0 a year earlier. The current conditions index jumped by 4.8 points to 140.9, while the expectations measure edged up by 4/10ths of a point to 92.3. The press release—which did not comment on the impact of the election results on sentiment—noted that younger consumers reported a “large jump in confidence.” 21.3 percent of survey respondents said that present business conditions were “good,” compared to 15.3 percent who saw them as “bad.”
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending November 23, 2024, First-Time Claims, seasonally adjusted): 213,000, -2,000 vs. the previous week, unchanged vs. the same week a year earlier). 4-week moving average: 217,000 (-0.2% vs. the same week a year earlier).
- New Home Sales (October 2024, Sales of New Single-Family Homes, seasonally adjusted annualized rate): 610,000 (-17.3% vs. September 2024; -9.4% vs. October 2023).
- Pending Home Sales (October 2024, Index (2001=100), seasonally adjusted): 77.4 (+2.0% vs. September 2024; +5.4% vs. October 2023).
- FHFA House Price Index (September 2024, Purchase-Only Index, seasonally adjusted): +0.7% vs. August 2024; +4.4% vs. September 2023.
- S&P Case-Shiller Home Price Index (September 2024, National Index, seasonally adjusted): +0.3% vs. August 2024; +3.9% vs. September 2023.
- FOMC Minutes
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What We Learned About the U.S. Economy Last Week 