● Eurozone Composite PMI rise to 4-1/2 year high in Nov | Markit
● Germany Composite PMI ticks up to 3-mo high in Nov | Markit
● France Composite PMI slips to 3-mo low in Nov | Markit
● Kansas City mfg index in Nov: first positive reading since Feb | KC Star
● Eurozone consumer confidence index rises in November | Reuters

● Income Inequality: Why It Matters and Why Most Economists Didn’t Notice
By Matthew P. Drennan
Summary via publisher (Yale University Press)
Prevailing economic theory attributes the 2008 crash and the Great Recession that followed to low interest rates, relaxed borrowing standards, and the housing price bubble. After careful analyses of statistical evidence, however, Matthew Drennan discovered that income inequality was the decisive factor behind the crisis. Pressured to keep up consumption in the face of flat or declining incomes, Americans leveraged their home equity to take on excessive debt. The collapse of the housing market left this debt unsupported, causing a domino effect throughout the economy. Drennan also found startling similarities in consumer behavior in the years leading to both the Great Depression and the Great Recession.
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The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to decline in the October update that’s scheduled for Monday (Nov. 23), based on The Capital Spectator’s average point forecast for several econometric estimates. The projection for -0.21 reflects a modest decline from -0.09 in September, which indicates US economic activity that’s slightly below the historical trend rate of growth. Only negative values below -0.70 signal an “increasing likelihood” that a recession has started, according to guidelines from the Chicago Fed. Using today’s estimate for October as a guide, CFNAI’s three-month average is expected to reflect an expansion that’s moderately below the historical trend but still above the tipping point that marks the start of a new US recession.
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Yesterday’s November survey data from the Philadelphia Fed hints at the possibility that a stronger trend is emerging for the manufacturing sector. The headline number for this regional benchmark posted its first positive reading in three months.
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● US leading indicator rises more than expected in Oct | RTT
● US jobless claims fell for week through Nov 14 | NY Times
● US Consumer Comfort Index sticks close to 13-mo low | Bloomberg
● Philly Fed manufacturing index rises in Nov after 2 monthly declines | RTT
● ECB minutes suggest more stimulus in December | WSJ
● UK retail sales fall in Oct after strong Sep | BBC

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