There’s no shortage of macro risks facing the US economy, but personal income and spending aren’t among them, at least not in today’s update. Both measures increased at healthy if unspectacular rates in November vs. the previous month, the Bureau of Economic Analysis reports.
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Asset allocation is widely celebrated as the most-important investment decision, but the details matter… a lot. Indeed, sometimes asset allocation can be your worst enemy, depending on how the strategy is executed.
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● US consumer spending in Nov rises by most in 3 mos | Bloomberg
● US Q3 GDP revised down slight to 2.0% | CBS Money Watch
● US economy set to grow less than 3% for the 10th straight year | Mkt Watch
● US existing home sales plunge; new rules seen as drag | Reuters
● Richmond Fed: Manufacturing expands in Atlantic region | Bond Buyer
● Summers: Fed’s mistakes are a cause for pessimism | WaPo
● OPEC: Developing Nations Will Drive Energy Demand Next 25 Yrs | MNI

Financial stress in the US has been low in recent weeks, according to four benchmarks published by Federal Reserve banks. The relative calm comes in the wake of the first increase in the Fed funds rate in nearly a decade, a widening of the high-yield spread and increased anxiety about the outlook for economic growth. Despite those changes, several metrics that are designed to quantify the overall level of financial stress point to a generally serene state of affairs for the nation’s financial system.
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● Chicago Fed: US economic growth slowed in Nov | Chicago Fed
● Eurozone consumer confidence ticks higher in Dec | EC
● German consumer confidence projected to improve in Jan | DW
● China loses another eco indicator: Minxin Suspends PMI | Bloomberg
● Manufacturing employment in China: In a class of its own | Petersen Inst
● China outlines economic plan for 2016 | WSJ

US economic growth in November remained below the historical trend rate for the second month in a row, according to this morning’s update of the Chicago Fed National Activity Index. Revised data for the benchmark’s three-month moving average (CFNAI-MA3) slipped to a negative 0.20 reading last month–down slightly from -0.18 in the previous month and the lowest since March.
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US economic growth is on track to decelerate in the fourth quarter, according to The Capital Spectator’s average estimate via several econometric forecasts. Q4 GDP is projected to rise at a sluggish 1.5% rate (seasonally adjusted annual rate), down from the 2.1% advance in Q3.
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Equities in emerging markets bounced higher last week, jumping 3.4% for the five trading days through Dec. 18 via the Vanguard FTSE Emerging Markets ETF (VWO). The gain–the first weekly advance since mid-November–marks the strongest performance among the major asset classes for the week just passed, based on a set of proxy funds.
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● PMI: Weakest rise in US service sector output since Dec 2014 | Markit
● Kansas City Fed mfg index turns negative again in Dec | KC Fed
● US business expectations for inflation tick higher to 1.9% | Atlanta Fed
● Oil falls to 11-year low | Reuters
● The finer points of aging expansions and bull markets | Bloomberg

Another year over, but before a new one begins it’s time to highlight some of the memorable titles that have appeared in The Capital Spectator’s weekly Book Bits column. Here are five economics/finance books from the 2015 archives that are worthy of a fresh look. Two additional recaps will follow over the next two weekends. Happy reading!
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