US and foreign stocks fell this past week as did commodities while treasury bonds rose as generally weak economic numbers raised concerns about growth in the US and abroad. Earnings disappointments, a decline in December durable goods orders and weaker than expected 4th quarter Gross Domestic Product all added to the selloff. The markets even ignored the slightly more dovish comments from the Federal Reserve on Wednesday but did rally on Thursday on the heels of a better first time claims for unemployment number. Concern is increasing that consumers are pocketing the gasoline savings rather than spending it.
- The Commerce Department reported the following:
- Durable goods orders declined a seasonally adjusted 3.4% in December from November. This was much worse than economists forecast for an increase. For calendar year 2014 durable goods orders rose 6.2%. Orders for the less volatile non-defense capital goods excluding aircraft fell just 0.6% in December.
- The initial reading of US economic growth, the Gross Domestic Product, rose at a 2.6% annual pace in the fourth quarter. For the calendar year GDP rose 2.4% which is only slightly higher than the average of 2010 through 2013 of 2.2%. The report indicated that consumers increased their spending in the fourth quarter but businesses investment and government spending slowed. However, excluding businesses rebuilding their inventories, the real final sales of domestic product, grew only 1.8% in the fourth quarter.
- The price index for personal consumption expenditures fell at a 0.5% annual rate in the fourth quarter compared to an increase of 1.2% in the third quarter. Excluding volatile food and energy components, prices rose at a 1.1% annual rate in the fourth quarter versus 1.4% in the third quarter.
- Completed new home sales rose 11.6% in December much better than expected.
- The National Association of Realtors reported that pending new home sales dropped 3.7% in December versus a forecast of a 0.6% increase.
- The S&P/Case Shiller Home Price Index rose 4.7% for the 12 months ending in November indicating that home prices rose at a slower pace than in 2013.
- The Labor Department reported Thursday that 1st time claims for unemployment dropped sharply in the prior week to 265,000, from a revised 308,000 in the prior week. The four week moving average of claims also fell to 298,500.