Rover's Weekly Market Brief - 12/23/2022

December 23, 2022 Printer Friendly Printer Friendly


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The U.S. Census Bureau reported housing starts dropped 0.5% to a seasonally adjusted annual rate of 1.427M units in November. Single-family housing starts which account for the largest share of homebuilding slid 4.1% to a rate of 828K units, down 16.4% from a year ago. Conversely starts of five units or more surged 4.8% to a rate of 584K units, up 24.5% from a year ago. New residential building permits, a proxy for future construction, fell 11.2% to a seasonally adjusted rate of 1.342M units. New residential building permits are running 22.4% below their November 2021 level. Single-family permits were down 7.1% from October’s revised 841K, while multifamily permits declined 17.9% to 509K. Leading the decline in building permits was the West (-16.4%), followed by the South (-12.2%) and Midwest (-6.2%). Only the Northeast saw an increase (+1.8%). Single-family housing completions at 1.047M, were 9.5% above October’s revised reading, while multifamily completions were up 15.9% to 430K. The number of houses approved for construction but not yet started dropped 2.0% to 293K units, with the backlog for single-family housing dropping 3.4% to 143K.

The Conference Board’s Consumer Confidence Index® jumped in December to 108.3 (1985=100), up significantly from November’s upwardly revised 101.4 reading. The index is now at its highest level since April and marks the first increase in 3 months. The Present Situation Index, which is based on consumers’ sentiment toward current business conditions and the labor market, rose to 147.2 from an upwardly revised 138.3 the previous month. Based on consumers’ six-month outlook for income, business, and labor market conditions, the expectations index also improved, increasing to 82.4 from an upwardly revised 76.7 the previous month. A reading below 80 for the expectations index is considered recessionary. The share of consumers planning to purchase homes, automobiles, and big-ticket appliances all decreased, while intentions for vacations improved. “The Present Situation and Expectations Indexes improved due to consumers’ more favorable view regarding the economy and jobs. Inflation expectations retreated in December to their lowest level since September 2021, with recent declines in gas prices a major impetus” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

The final estimate of GDP for 2022 Q3 reported the economy grew at an annual rate of 3.2.% and follows the upward trend of the second estimate of 2.9%, and the first estimate of 2.6%. Q3’s final estimate contrasts with 1.6% Q1 and 0.6% Q2 contractions. Primary contributors to the upward revision were stronger-than-expected readings for exports and consumer spending. The 14.6% surge in exports reflected increases in both goods +17.8% and services +7.5%. Consumer spending – which makes up more than two-thirds of GDP rose 2.3% in the final report as compared to the earlier reported 1.7%. Within consumer spending, a +3.7% increase in services – led by health care and “other” services was partly offset by a -0.4% decrease in goods – led by automobiles and parts as well as food and beverages. Non-residential fixed investment was up +6.2% – led by increases in equipment +10.6% and intellectual property products +6.8%. Residential investment, a gauge of homebuilding, plummeted -27.1% and follows a -17.8% drop in Q2, reflecting the ongoing slowdown in the housing market. The personal consumption expenditures (PCE) price index, a measure of inflation used by the Fed, increased by +4.3% in Q3, as compared to +7.3% in Q2. Excluding the more volatile food and energy prices, the PCE price index rose +4.7% in Q3 equaling Q2.

Upcoming Economic Reports:

Tuesday December 27 – Goods Trade Balance (November)

Wednesday December 28 – Pending Home Sales (MoM) (November)

Earnings Calendar:


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