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Economic Update

December 2, 2013

Economic themes: Retail, Manufacturing, Durable Goods, Housing.

  • Retail: U.S. retailers posted $57.4 billion in sales for the four days beginning 11/28/2013, a decline of 2.9%, and the first decline since 2009.  Online sales increased 15% to a record $1.2 billion.
  • Manufacturing: The ISM manufacturing index posted a 57.3 reading for November, above a forecast of 55.5, implying a pickup in business spending with increases seen in orders, production and employment.
  • Durable Goods: New Factory orders declined by 2% in October, in line with estimates due to declines in aircraft orders.  Gains were seen in autos, metals and electronics.  Some speculate the government shutdown may have had an impact.
  • Housing: The S&P Case Shiller Index increased by 1.0% in September, and is up 13.3% year over year, spurring some whispers of a bubble particularly out west.  Price increases are good for homeowners, but could slow home sales.  Permits increased by 6.2% in October after gaining 5.2% in September to a 1.034 million pace.  Housing starts data has been delayed due to the government shutdown.
  • Economic highlights for the week ahead:
    • Wednesday, 12/04/2013: International Trade, New Home Sales.
    • Thursday, 12/05/2013: GDP, Jobless Claims.
    • Friday, 12/06/2013: Employment Situation, Personal Income and Outlays.

Municipal market themes: California, Jefferson County, AL.

  • California: Moody’s Investors Service stated the recent forecast of surpluses for the State of California is a credit positive, although stated the importance to save today for the next economic downturn.
  • Jefferson County, AL: The distressed county is preparing to close a $1.7 billion sewer deal to pay off $3.2 billion in defaulted warrants, which will allow the plan of adjustment to be implemented, ending a two year chapter 9 bankruptcy.



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