Consumer Sentiment Higher Than Expected
Consumer spending defied expectations according to the University of Michigan’s final December sentiment index reading which rose to 98.3, with anything above 50 considered positive. Expectations had the reading at around 97.4, with a preliminary reading coming in earlier at 97.5.
Personal Income and Spending Outpaces Income Growth
Personal Income and Spending grew for November with a 0.4% increase in purchases compared to a forecast 0.3%, and a 0.1% increase in the PCE Index, a key index used by the Federal Reserve to help determine monetary policy around interest rates.
As spending outpaced wage growth, the rise in spending may not be sustainable.
Brief Uptick in Gold Price Following Reduced Core Durable Goods Orders
Durable goods orders jumped 0.8% in November after the steep 4.3% drop seen the month before, according to today’s government report. Market consensus had called for a 1.% increase. However, increased defense spending masked a 0.3% drop in core durable orders which excludes military aircraft and is a less volatile metric.
Japanese Central Bank Maintains Negative Interest Rate
The Bank of Japan (BOJ) has elected to maintain the current rate of interest with no change, as predicted by the vast majority of polled economists. Trade protectionism, falling oil prices, and increased sales taxes were all influential factors that will impede economic growth prospects for Japan in the near future.
Gold Price Climbs With Initial Jobless Claims Below Expectations
Initial applications for unemployment benefits in the US dropped last week along with the four-week moving average for such claims, indicating strong activity in the tight labor market.
Bank of England Leaves Interest Rate Unchanged Amid Brexit Uncertainty
The central bank of England has chosen not to increase rate hikes for the time being, with future monetary policy regarding rate hikes uncertain and dependent on the outcome of Brexit which will be revealed in under 100 days.
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