Confidence in the US economy has wobbled over the last several months, in part due to mixed updates for several key indicators. But drawing conclusions about the broad trend by cherry picking data points is a dangerous game if you’re looking for reliable estimates of recession risk. Recent history reaffirms this message quite clearly. Despite the rush in some corners this autumn to declare that a new downturn is fate, a diversified set of economic and financial indicators has yet to confirm such claims.
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● FOMC minutes focus on Dec rate hike | Fox
● US housing starts fall to 7-mo low as permits rise | Reuters
● More Eurozone stimulus? Oil may be the key | Bloomberg
● Bank of Japan leaves policy unchanged despite new recession | RTT
● UK retail sales growth slows more than expected in Oct | Bloomberg

Residential construction activity tumbled 11% last month, falling at a deeper rate than expected, the US Census Bureau reports. The news adds another dovish factor into the analysis for the already wobbly outlook for a rate hike at next month’s Fed policy meeting. Newly issued building permits rose in October, offering a positive counterpoint to the slide in new housing starts, which was led lower by a slump in multi-family units. But to the extent that there’s a bullish spin to promote, it fades when reviewing the year-over-year comparisons.
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No one will confuse the recent reviews of the US economic trend as delivering clear signs of roaring higher these days, although there’s enough growth to keep the outlook for a rate hike alive for the Fed’s policy meeting next month. But everything comes with qualifications in the new world order, courtesy of the mixed messages that keep popping up in the numbers.
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● US industrial production falls for 2nd month in Oct | WSJ
● Ind pro slides but Oct mfg output rises in US, first time in 3 mos. | Bloomberg
● US consumer inflation ticks higher in Oct but remains low | USA Today
● US home builder sentiment falls from decade high in Nov | Bloomberg
● ECB board member: too early to judge econ impact of Paris attack | MNI

Housing starts are expected to decline to 1.168 million units (seasonally adjusted annual rate) in tomorrow’s October update, according to The Capital Spectator’s average point forecast of several econometric estimates. The projection represents a modest retreat from 1.206 million units in the previous month’s report for residential construction activity.
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Industrial output continued to contract last month, according to this morning’s report from the Federal Reserve. US production slipped 0.2% in October, dashing expectations for a mild gain via two surveys of economists. The decline leaves the year-over-year trend higher by only 0.3%–the weakest advance in nearly six years.
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Bloomberg reports that “one of Wall Street’s biggest bulls” has cooled on consumer stocks and is shifting to energy shares: “Thomas Lee, managing partner at Fundstrat Global Advisors, has opted to upgrade energy to overweight while downgrading the consumer discretionary sector, citing rising labor costs and the inverse relationship between energy and consumer-oriented stocks over the past decade and a half.”
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● NY Fed mfg index falls for 4th straight month in Nov | AP
● US consumers plan to spend more this Christmas | Gallup
● UK inflation still falling in Oct | Bloomberg
● ZEW: Economic sentiment in Germany rises in Nov | Reuters
● Limited impact on markets from Paris attacks | Reuters
● Measuring the economic costs of terrorism | NY Times
● France won’t meet deficit targets due to terrorism | MNI