Skip to main content

ECONOMIC NEWS: Signs of strength continue, suggest ‘solid growth’ ahead

The November readings of two important barometers indicated that the U.S. economy is poised for continued growth as 2017 comes to a close.

The Conference Board Leading Economic Index rose 1.2 percent, to 130.4, after increases in August and September, and the University of Michigan’s Index of Consumer Sentiment, though it fell to 98.5 from October’s 100.7, was at its second-highest level in 13 years.

“The U.S. LEI increased sharply in October, as the impact of the hurricanes dissipated,” Ataman Ozyildirim, director of business cycles and growth research at The Conference Board, said in a statement. “The growth of the LEI, coupled with widespread strengths among its components, suggests that solid growth in the U.S. economy will continue through the holiday season and into the new year.”

Richard Curtin, chief economist of the University of Michigan’s Surveys of Consumers, said in a statement that since the start of this year the sentiment index has been at its highest levels since 2004.

“What has changed recently is the degree of certainty with which consumers hold their economic expectations,” Curtin said. “In contrast to the media buzz about approaching cyclical peaks and an aging expansion, with the implication of greater uncertainty about future economic trends, consumers have voiced greater certainty about their expectations for income, employment and inflation.”

“Inflation expectations have shown the smallest dispersion on record, and increased certainty about future income and job prospects has become a key factor that has supported discretionary purchases,” Curtin added. “To be sure, caution is warranted, given that the current expansion will soon be the second-longest expansion since the mid-1800s, as well as the potential for significant changes in tax policies and the new Fed leadership and board members.”

Separately, sales of new and existing homes rose in October.

The Commerce Department said Monday that new-home sales hit a 10-year high for the month, rising 6.2 percent to a seasonally adjusted annual rate of 685,000, from 645,000 in September. Sales were up 18.7 percent from the October 2016 estimate of 577,000.

“New-home sales are a leading indicator, and the jump in October sales are leading the economy higher as we finish out the year,” Chris Rupkey, chief economist at MUFG in New York, told Reuters. “You have to be very confident to make the biggest big-ticket purchase of your life.”

Separately, existing-home sales also had a solid October, rising 2 percent, to a seasonally adjusted annual rate of 5.48 million, from a downwardly revised 5.37 million in September, the National Association of Realtors said.

Sales, however, are 0.9 percent below the pace the market set last October.

Lawrence Yun, the NAR’s chief economist, said in a statement that sales rose in all four major regions of the country.

"Job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home," Yun said. "While the housing market gained a little more momentum last month, sales are still below year-ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated."

"The residual effects on sales from hurricanes Harvey and Irma are still seen in parts of Texas and Florida,” Yun added. “However, sales should completely bounce back to their pre-storm levels by the end of the year, as demand for buying in these areas was very strong before the storms."

The NAR said the median existing-home price for all types of housing in October was $247,000, up 5.5 percent from $234,100 in the same month last year. It was the 68th month in a row that the price increased on a year-over-year basis.

Meanwhile, Elizabeth Mendenhall, president of the NAR, characterized the U.S. House and Senate tax-reform bills as an attack on homeowners and homeownership.

"Making changes to the mortgage interest deduction, eliminating or capping the deduction for state and local taxes and modifying the rules on capital gains exemptions poses serious harm to millions of homeowners and future buyers," Mendenhall said.

"With first-time buyers struggling to reach the market, Congress should not be creating disincentives to buy and sell a home. Furthermore, adding $1.5 trillion to the national debt will raise future borrowing costs for our children and grandchildren."

New orders for manufactured durable goods fell $2.8 billion, or 1.2 percent, in October, to $236 billion, the Commerce Department said. It was the first time in three months that orders fell, and it followed a September increase of 2.2 percent.

The department said shipments of durable goods rose $300 million, or 0.1 percent, to $241.0 billion in October. They have been up during five of the past six months.

MarketWatch lists several important reports that are scheduled for release this week. On Wednesday economy watchers will see the Commerce Department’s second estimate on third-quarter gross domestic product. In its initial release in late October the department said GDP rose 3 percent for the quarter.

Also on Wednesday the Federal Reserve Board will release its latest Beige Book report on economic conditions in its 12 districts.

On Thursday the Commerce Department will release its October data on personal income and consumer spending and the Labor Department will release its October report on core inflation.

Friday will bring reports on car and truck sales for October.



AMI Hosts Pre-Conference Sessions

The sessions on leadership and marina management, and a tour of a nearby marina and boatyard operation, precede today’s official kickoff of the group’s annual conference.


Boating’s Greatest Thingamabob

The Seattle Boat Show kicks off next week with nearly 300 exhibitors, 800 new boats and the construction of a 100-foot Rube Goldberg boat machine.

1_YEARGIN copy

Business for Good

Companies have a unique platform to make people’s lives better through products and services, how we treat employees and the kind of advocate we are for our industry.


Are You Improving the Service Experience?

This month’s Pulse Report survey asks dealers about tactics being employed to improve the service department, along with other questions about retail conditions. Take the survey here.


Off the Hook Yacht Sales Acquires Two Marinas

The company announced that it purchased facilities in Hampstead, N.C., and Georgetown, Md.


Gillen Announces Expansion, New Hire

The yacht services company will move into a new, 15,000-square-foot location in West Palm Beach Fla., run by operations manager Tony Matherly.


Business for Good

Companies have a unique platform to make people’s lives better through products and services, how we treat employees and the kind of advocate we are for our industry.


Dometic Posts Sales Increase for Q4

Net sales of $596 million were up 11% compared with the previous-year quarter, and profit was reported at $2.6 million.