Economic Insights - December 2019

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As of the end of November, this year had produced 26 new S&P all-time highs. That follows 18 new all-time highs in 2018, 62 in 2017, 18 in 2016, 10 in 2015, 53 in 2014, and 45 in 2013.  And, history tells us that in a Bull market, all-time highs tend to come in clusters.  That is, strength begets strength.  This Bull market has sent that message over and over.  2019 has been no exception. Yet many still can’t accept it.

Consumer evaluations of the U.S. economy improved in November, with Gallup’s Economic Confidence Index registering +29.

That is the best reading since July.

The consumer sentiment index jumped 2.4 points to 99.2 in the preliminary December report from the University of Michigan survey.  Sentiment had already improved slightly to 96.8 in November from 95.5 in October.  This beats the 98.3 reading from last December 2018.  This is the highest reading since the report of 100 in May.  Notably, both the current and expectations components improved, as the current conditions index climbed to 115.2 from November’s 111.6.  Meanwhile, the expectations component rose to 88.9 versus the prior 87.3.

Obviously, the average consumer isn’t buying into the pervasive negative rhetoric.  In fact, it appears consumers are in a spending mood with online shopping was up 22 percent year-over-year.  And, according to Fiserv’s First Data Insights, Black Friday brick, and mortar sales saw a 4.2 percent increase compared to 2018.  The greatest increase over normal shopping activity was seen in electronics and appliances, sporting goods, and clothing and shoes.  Electronics and appliance stores saw the largest average ticket size at $214 per transaction.  Notably, Cyber Monday saw a record of $9.4 billion spent by online shoppers; Amazon said Cyber Monday 2019 was the “‘single biggest shopping day in company history.

It’s obvious that the recession calls for 2019 were off base and perhaps driven by an “agenda”. The calls for a recession in 2020 will more than likely suffer the same fate.

Over at least the past 50 years, one of...

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