Consumer Confidence likely rebounded in December to 79.0 after an unexpected decline in November left the index at 70.4. The Conference Board’s confidence measure surprised last month with a decline to an eight month low. At the time, we suspected this was due to the fact that the Conference Board’s survey period closed around November 15th and households were still suffering from lagged effects on confidence after the government shutdown. With a budget deal in place alongside declining unemployment, rising home prices, and strong equity markets, confidence should be set for a solid rebound in December. As usual we will look closely at the employment related details in the report for early indications on the labor market for the month.
„The December ISM Manufacturing survey will likely remain strong, gaining 0.1 point to 57.4. Regional manufacturing surveys for December so far have shown modest improvement. The Empire Manufacturing survey rebounded to positive territory, albeit just barely, at 0.98 while the Philadelphia Fed Business Outlook Survey gained 0.5 points at 7.5. On balance, information for manufacturing activity in December suggests sustained strength.
Total Vehicle Sales likely ran at a 16.0 million unit rate in December, after a strong 16.3 million unit rate in November. Industry analysts suggest that December sales are following a similar pattern to November where sales will be skewed to the end of the month when dealers ramp up incentive pricing to meet year-end sales targets and clear 2013 inventories. The remaining 2013 model-year stock represents 26% of current inventory, according to reports from Kelley Blue Book. If our forecast is accurate, December sales would bring the 2013 total up 8% over 2012.
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