Friday Economic Snapshot: Shutdown over, consumers feeling battered
The good news this week is that Washington managed to get together long enough to pass a short-term budget deal and avoid defaulting on the country’s debt. The bad news is it was a short-term deal, so get ready to go through this again in early 2014.
Investors liked the news of an agreement, with the market climbing at a rapid pace as the deal was finalized. As of midday Friday, the S&P index was headed for its biggest weekly advance since July.
The whole situation has left consumers decidedly lacking in confidence. The October Bloomberg Consumer Comfort Index expectations gauge (which measures future expectations) dropped to minus 31 for the month from minus 9 in September. That was the biggest one-month drop since the collapse of Lehman Brothers in 2008.
The Thomson Reuters/University of Michigan’s preliminary index for October showed consumer sentiment at 75.2, down from 77.5 in September and its lowest level in nine months.
Good (or at least normal) news that some are interpreting as bad news this week on the housing front. Zillow reported home price growth slowed and even turned negative in some areas from August to September.
That’s a fairly normal, though, as the mix of homes changes from summer to fall. Most notably, fewer move-up homes change hands because most of those buyers want to be in place before school starts.
The number we want to really pay attention to is year-over-year change, and that’s still very positive, with a 6.4 percent increase at the end of the third quarter from 2012.
Government stats are back
We’ll start seeing unemployment numbers from the Bureau of Labor Statistics again next week, with August local numbers and September’s national numbers hitting the street Monday and Tuesday. In the following days, the producer and consumer price indices, along with export numbers will be released.
Government officials are already warning that the numbers could be off the next few months because data was not collected during the shutdown, but we’ll have to see what shakes out.