Economic Insight
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<strong>Economic</strong><br />
Commentary<br />
<strong>Economic</strong> <strong>Insight</strong><br />
January 8, 2016<br />
Consumer spending remains restrained<br />
Personal spending rose 0.3% in November as expected, a three-month high after no growth the month prior. Year-over-year,<br />
consumer spending is up a modest 2.9%, albeit down from a 4.4% pace this time last year. Despite record low gasoline<br />
prices, consumer spending, while still positive, continues to lose momentum amid minimal income growth and still modest<br />
hiring gains.<br />
Vehicle sales slowed from 18.05M to a 17.22M unit pace at the end of the year, the second month of decline after reaching a<br />
10-year peak of 18.12M in October. Still at the top of consumer’s shopping lists, vehicle sales have slowed 4.6% from<br />
October’s peak.<br />
Housing activity retreats to 1 ½ year low<br />
Existing home sales fell more than 50 times 1 the expected decline, dropping 10.5% in November to a 4.76M unit pace, the<br />
weakest since April 2014. Furthermore, pending home sales – which typically become existing home sales a month or two<br />
later – unexpectedly fell 0.9%, suggesting additional weakness in demand in the pipeline.<br />
New home sales rose 4.3% in November to a 490k, albeit the third consecutive month below a 500k unit pace.<br />
1 The expected decline in November was 10k, according to Bloomberg. The actual decline in pace of sales was 560k.<br />
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2015 Stifel, Nicolaus & Company, Incorporated One South Street, 15 th Floor Baltimore, MD 21202 Member NYSE Member SIPC 888.290.1762
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