Analysts Expect Reports on Spending, Home Sales to Show Decine in November

Despite a not-as-bad-as-feared Black Friday (the day after Thanksgiving), retail sales fell in November. Analysts expect the financial releases next week to show a continued contraction in consumer spending (a broader measure, including services, is due for release this week). And housing data is anticipated to be not-so-hot either.

I don’t pretend to have any feel for markets, but I was struck earlier in the month how the stock market shrugged off almost all bad news, but did not react much to the announcement of the auto industry rescue. True, at that point, observers may have assumed that it HAD to happen, so the confirmation that it was on was a big yawn.

But I wonder if investors are somewhat uneasy that the Fed (and soon the Administration) are moving into uncharted territory with the size of the programs on tap. Although the consensus among economists is that these programs will succeed (albeit with the risk of substantial inflation down the road) the flip side is the consensus among economists was that (until recently) we’d have no or only a shallow recession.

From Bloomberg:

Spending by American consumers fell in November for a record fifth month, while home sales and orders for durable goods also declined as the recession deepened, economists said before reports this week.

Purchases dropped 0.7 percent last month, according to the median estimate of economists surveyed by Bloomberg News ahead of a Commerce Department report Dec. 24. Combined sales of new and existing homes approached the lowest level in at least nine years, government and private figures may also show….

This week’s spending report includes data on services, such as utilities and medical care, not tracked by the retail figures. Personal income was unchanged in November after rising 0.3 percent the prior month, economists forecast the report will also show.

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