The U.S. stock market finished the week lower as rising fears over global growth hinders investor sentiment. Interest rates rose slightly after dropping severely last week, with the 10-year treasury yield rising 4 basis points to 2.89%. The spread between the 10-year treasury yield and the 2-year treasury yield rose by 3 basis points to 0.14% as short-term interest rates were little changed. Signs of slowing growth in China had the U.S. Dollar Index reach its 19-month high of 97.40 while the price of gold, a contrarian to the U.S. dollar, dropped 0.92% to $1,242.30 an ounce. The price of crude oil dropped 2.50% to $51.18 a barrel despite OPEC’s agreement to cut oil production as U.S. production continues to weigh on prices.
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THIS WEEK’S ECONOMIC HIGHLIGHTS
The Producer Price Index (PPI), a measure of wholesale price inflation, increased by 0.1% in November for a year-over-year change of 2.5%. Core PPI, which excludes the volatile food and energy components, increased by 0.3% in November and resulted in a year-over-year change of 2.7%.
- The Consumer Price Index (CPI), a measure of consumer price inflation, was unchanged for the month of November and up 2.2% year-over-year. Core CPI, which excludes the volatile food and energy components rose 0.2% in November, however year-over-year it is also up 2.2%.
- Initial unemployment claims dropped by a very sharp 27,000 to 206,000 for the week ending December 8th, after pivoting higher over the several weeks prior. Continuing unemployment claims, which lag’s initial claims by a week, rose 25,000 to 1.66 million.
- U.S. retail sales rose 0.2% in November as gasoline sales held down its growth. However, the “control group” of retail sales, which is more in line with GDP’s consumer spending component and excludes auto, gasoline, building material, and food service sales rose a strong 0.9%.
- Industrial production increased by 0.6% in November as it was boosted by increases in utility and mining production. However, manufacturing output was unchanged as construction supplies suffered its third straight monthly contraction.
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