Go rust belt!
Maybe I’ll finally get a good price for the condos I bought in the early 80’s when I lived there…

Chicago PMI

Highlights
Monthly growth in composite activity in Chicago remains exceptionally strong, at 63.0 for this month’s reading vs an even stronger 65.9 in October. Strength is centered where it should be, in new orders which are at a robust 68.8. The prior reading, at 74.3, was a 9 year high. Production slowed in the month but remains very strong at 64.3 vs 71.1.

Employment is a special standout in today’s report, up 3.2 points to 60.9 which is the highest reading in more than 2 years. Inventories, at 61.1, show a sudden build as Chicago businesses prepare to fill orders. Backlog orders are growing strongly, deliveries are slowing, and price inputs are rising — all consistent with strong activity.

This report, which covers all areas of the Chicago economy, points to another month of solid growth for the coming ISM reports on manufacturing and non-manufacturing. The Dow is moving to opening highs following today’s report.

Consumer Sentiment

Market Consensus before announcement
The Reuter’s/University of Michigan’s consumer sentiment index slipped to 72.0 for the early November reading versus 73.2 for final October and versus 75.2 in the early October reading. The latest result was the 7th straight dip going through both early and final readings back to final July. The erosion continues to be centered in expectations which were at 62.3, down steadily from July’s peak at 76.5. Current conditions have also been coming down but less so, to 87.2 in the preliminary November reading versus a peak of 99.7 in early July.

Just noticed this. The question is whether it was proactive/desired and ongoing or one time/forced due to sequester and FICA hike income reductions.

“Household debt jumped US$127 billion in the third quarter, the biggest increase since the first quarter of 2008. The rise was across the board as Americans went into greater debt to buy everything from houses to cars to schooling. Household debt is now growing faster than both gross domestic product and disposable income, returning to the pattern that drove both economic growth and serial bubbles in the past decade.”

(Thanks Edward Harrison)

Thanks JC!

John Carney: What I Read

I’ll open my email to see what my colleagues at CNBC have been emailing me about, what sources have been emailing me. I’ll read through what I consider the big macro economics blogs, like Pragmatic Capitalism, or Mosler Economics, The Money Illusion, and occasionally Paul Krugman, to see what they’re talking about.

Corporate Results Expose Lack of Confidence

November 18 (WSJ) — Though corporate profits were higher overall, companies slashed their spending on factories, equipment and other performance-enhancing investments by 16% from year-earlier levels, according to an analysis by REL Consultancy for The Wall Street Journal. Almost 90% of the companies that have given financial forecasts for the final quarter of the year have prompted Wall Street analysts to lower their numbers. Only a dozen companies have painted rosier pictures, according to data tracker FactSet. With more than 90% of companies in the S&P 500 index having posted results for the quarter, blended earnings were up 3.5% from a year earlier, and profit remained in record territory, according to FactSet. Profit margins, at 9.6%, were near records, thanks to cost cutting, automation and lower commodity prices. But revenue growth was a tepid 2.9% from a year earlier.

First Nov regional.

Stocks all bulled up on Yellen rates low for longer thing which of course just stepping on the brake harder ;)

IP cap util also down a tad as well. Weak yen can’t be helping US exports any as yesterday’s trade data hinted.

Claims as high as they are and 1.9 productivity growth could mean softer jobs ahead.

Mtg prch apps continue down yoy.

Good thing gas is down!

NY Fed: Empire State Manufacturing Activity declines in November

Note the comments on the deflationary bias from Japan towards the end.

Soft NY manufacturing, export data fan new US recovery fears

This supported Q3 GDP but will need to grow same and more to keep 2% growth going to replace falling government deficit etc.

NY Fed: Household Debt increased in Q3, Delinquency Rates Improve

By Bill McBride