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Look forward to December 23, 2019 week: Holidays will disrupt released calendars; most reports can wait until after the New Year for closer consideration

I’m going to extend the look forward at the December 23 week into early the following week to include the final business days of 2019. The arrival of Hanukkah on Monday and Christmas on Wednesday mean that much of the week will be slow and many offices will essentially be closed. Many workers are going to use vacation time to their best advantage around the holidays.

The bond and stock markets have an early close on Tuesday, December 24 and a full close on Wednesday, December 25. Bond markets will close early on Tuesday, December 31 for New Year’s Eve, but not stocks which will have a full day at year-end. Stock and bond markets have a full close on Wednesday, January 1.

When offices open up again on January 2, it will take a day or two to get back into production. The first business day of the month will not see the release of the ISM Manufacturing Index. The December data will be reported at 10:00 ET on Friday, January 3. The ISM Non-Manufacturing Index will also be delayed a day to Tuesday, January 7. The minutes of the December 10-11 FOMC meeting will be released on Friday, January 3 at 14:00 ET.

Most of the economic data in the next week or so can be safely put aside for consideration after the New Year. Little of it will directly pertain to the labor market and the outlook for the December Employment Situation that won’t be released until Friday, January 10 at 8:30 ET. The reports on initial jobless claims for the weeks ended December 14 and December 21 are set for release at the usual 8:30 ET on Thursday. The jump in claims in the November 30 week was partially unwound in the December 7 numbers and should work its way lower. The next two weeks will reflect the normal sort of end-of-year job cuts that businesses make to reduce costs, but probably less than usual after the burst of cuts late in November. After that, the pattern is for a surge in retail layoffs and to a lesser extent for transportation as the holiday season fades out. However, the strength in the labor market may mean that some workers who were originally hired as temps will stay on.


The last of the monthly reports for the housing market should line up behind the good numbers already reported. Sales of new single-family homes for November at 10:00 ET on Monday, December 23 are anticipated to show that consumers are turning to new construction where existing homes are simply not available or are proving more affordable. The NAR’s Pending Home Sales Index for November at 10:00 ET on Monday, December 30 are expected to reflect active signings of contracts for purchase that should show up in the existing home sales numbers in coming months. The FHFA House Price Index for October at 9:00 ET on Tuesday, December 31 is a bit behind the other numbers. It has been telling the tale of measured price gains in spite of a fairly warm housing market and that isn’t expected to change in the next report.

New orders for durable goods in November at 8:30 ET on Monday, December 23 (previously on December 24) will get see the transportation component benefit from an increase in aircraft orders at the Dubai Airshow. Boeing reported 63 new orders, a rise of 53 from the prior month. New orders for motor vehicles should also have had some gains after the end of the strike at GM. However, good news in November has already been overtaken by the announcement that Boeing will suspend construction of its 737 MAX aircraft in January. Boeing has experienced massive cancellations due to the air disasters associated with its 737 MAX models. This may well mean even more. Boeing has had net new orders totaling 56 for 2019 to-date. Another weak month in December and more cancellations could mean this shrinks further.

Regional surveys of manufacturing conditions in December will be the Richmond Fed’s Manufacturing Index at 10:00 ET on Tuesday, December 24 and the Dallas Fed’s Texas Manufacturing Outlook at 10:30 ET on Monday, December 30. It’s unlikely the reports will belie soft conditions signaled in the other regional surveys from the New York, Philadelphia, and Kansas City Feds.

Regional surveys for the service sector in December will be the Philadelphia Fed’s Nonmanufacturing Business Outlook at 8:30 ET on Tuesday, December 24, the Richmond Fed’s Survey of the Service Sector at 10:00 ET on Tuesday, December 24, and the Dallas Fed’s Texas Service Sector Outlook at 10:30 ET on Tuesday, December 31. The regional surveys do not present the sort of homogeneous picture that those for the manufacturing sector do. However, broadly it is expected that these will signal at least tame expansion.

Advance data on international trade in goods, and retail and wholesale inventories for November at 8:30 ET on Monday, December 30 will provide some pieces of the GDP puzzle for the fourth quarter in the form of rounding out net exports assumptions and how the change in private inventories is shaping up. Expectations for fourth quarter GDP are still in flux but starting to center around growth of about 2%. If so, this would be a trend-like performance and finish off the year with a respectable reading. The New York Fed’s Nowcast for GDP has been steadily revised upward and now stands at up 1.3% and the Atlanta Fed’s GDPNow is at up 2.1%.



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