Read the highlights of this week’s commentary from Helios:

  • The core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure that excludes food and energy, rose only 0.1% in November and 3.2% year-over-year. Notably, it rose 1.9% on a six-month annualized basis, below the Fed’s 2% target, for the first time in over three years.
  • Consumer spending in November increased by 0.2%, accompanied by a modest rise in the personal saving rate to 4.1%. Despite positive indicators such as improving inflation, downwardly revised monthly core inflation, and income growth surpassing spending growth, concerns about a potential economic slowdown persist.
  • Oil prices rose 3% last week as the escalating conflict in the Red Sea forced ships to take longer, safer routes. However, despite the short-term increase, the long-term outlook for oil remains bearish thanks to high US production and warmer weather conditions.
  • Purchases of new single-family homes fell by 12.2% in November to a 590,000 annual pace, a one-year low. This contrasts with recent positive trends, such as a six-month high in housing starts and improved homebuilder sentiment. The new home market is expected to improve in 2024, particularly with high inventories and more homes in the pipeline.

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