--- title: "Monday Update: Consumers Continue to Earn and Spend" description: What does the latest data reveal about the state of the economy? From consumers to housing, Commonwealth CIO Brad McMillan reviews it all in his Monday update. image: https://blog.commonwealth.com/hubfs/Brad_Images_IMO_Blog/2017/MarketOutlook_1.jpg --- [![The Independent Market Observer](https://blog.commonwealth.com/hubfs/IMO-Title-1.png "The Independent Market Observer")](https://blog.commonwealth.com/independent-market-observer) [![Commonwealth Financial Network](https://blog.commonwealth.com/hubfs/lockup_citron-1.png "Commonwealth Financial Network")](https://www.commonwealth.com/) - [Home](https://blog.commonwealth.com/independent-market-observer) - [About](https://learn.commonwealth.com/about/) ### ![print this page](https://blog.commonwealth.com/hs-fs/file-1376458285-gif/images/print.gif)Print # [Monday Update: Consumers Continue to Earn and Spend](https://blog.commonwealth.com/independent-market-observer/monday-update-consumers-continue-to-earn-and-spend) Posted by [Brad McMillan, CFA®, CFP®](https://blog.commonwealth.com/independent-market-observer/author/brad-mcmillan-cfa-caia-mai) Find me on: [LinkedIn](https://www.linkedin.com/in/bradmcmillancfa) [Twitter](https://x.com/BradMcMillanCFA) This entry was posted on Dec 18, 2017, 1:05:23 PM and tagged [In the News](https://blog.commonwealth.com/independent-market-observer/topic/in-the-news) [Leave a comment](https://blog.commonwealth.com/independent-market-observer/monday-update-consumers-continue-to-earn-and-spend#comments-listing) ![Monday update](https://blog.commonwealth.com/hs-fs/hubfs/Brad_Images_IMO_Blog/2017/MarketOutlook_1.jpg?width=300&name=MarketOutlook_1.jpg "Monday update")Last week had only three major reports, but they covered the spectrum of economic activity. Overall, the news was quite good—with faster income and spending growth, as well as continued industrial and manufacturing expansion. ##### Last week’s news On Wednesday, the **consumer price report** came in as expected. It showed headline inflation accelerating to 0.4 percent in November, up from 0.1 percent in October—taking the annual rate from 2 percent to 2.2 percent. The jump was largely due to an increase in energy prices, especially gasoline, where prices remain elevated post-hurricanes. The core inflation index, which excludes food and energy, went up by less than expected, at 0.1 percent in November, on a surprise decrease in clothing prices. This was down from 0.2-percent growth in October and dropped the annual figure to 1.7 percent from 1.8 percent. On Thursday, the **retail sales report** showed a surprising increase in sales. Growth rose to 0.8 percent in November, from an upwardly revised 0.3 percent in October. This bump occurred despite lower auto sales, after a post-hurricane surge. Core sales, which exclude autos and gas, also did better than expected. They were up by 0.8 percent in November, beating expectations of 0.4-percent growth and up significantly from an upwardly revised 0.4-percent growth in October. This result was driven by faster spending growth in general but also, in particular, by gasoline prices. Overall, the continued surge in retail sales suggests consumer confidence continues to translate into actual economic activity, which is good for economic growth. Finally, on Friday, **industrial production** did slightly worse than expected, with growth of 0.2 percent in November. This was below expectations of a 0.3-percent increase and down from an upwardly revised gain of 1.2 percent in October. The strong October number was due to a rebound from hurricane disruptions in September. As such, the decline is normal, and the expected growth remains at a healthy level. Manufacturing activity showed a similar decline, from an upwardly revised 1.4 percent to 0.2 percent, but it also remains at a healthy level. Also on the docket last week was the last Fed meeting of 2017, followed by Chair Yellen’s final press conference. As expected, the Fed raised rates at this meeting. The commentary and press conference gave little additional information, although the Fed apparently expects faster economic growth next year. ##### What to look forward to The week ahead looks very positive for economic data. Both the consumer and business sectors are expected to show continued growth at very healthy levels. On Monday, the December survey from the **National Association of Home Builders** came in at 74—well above the November level of 70, which was itself an eight-month high. Developers are clearly feeling very confident. On Tuesday, **housing starts** for November will be released. They are expected to pull back from 1.29 million to 1.25 million due to a decline in volatile multi-family starts. Single-family home starts are expected to continue to gain, however, suggesting that the decline is not fundamental. This is further supported by the strong industry confidence report. Also supporting this idea, on Wednesday, November’s **existing home sales report** is expected to increase from 5.48 million sales in October to 5.53 million in November. Although these numbers remain lower than a year ago, recent trends continue to be positive. On Friday, **new home sales** are expected to pull back from 685,000 in October to 651,000 in November after a series of strong gains. In both sales reports, limited inventory is a major factor. Overall, if the numbers come in as expected, we can conclude that the housing sector remains healthy, which should boost economic growth. Also on Friday, the **personal income and spending report** will be released. Income growth is expected to stay steady at a strong 0.4 percent in November, the same as it was in October. Although wage growth remains constrained, the growth in the number of jobs and average hours worked may push this result higher than 0.4 percent. Personal spending growth is expected to tick up from 0.3 percent in October to 0.4 percent in November. This increase likely would be due to the recent strong retail sales report, despite declines in auto sales and gas prices. Overall, these numbers would indicate continued healthy growth in the consumer sector. Finally, on Friday, the **durable goods orders report** is also expected to show strong growth. The headline orders are expected to shift from a decline of 0.8 percent to a gain of 1.8 percent on a rebound in transportation orders, particularly in aircraft. This data series is always volatile because of the inclusion of transportation; core orders, which exclude transportation, are a much better economic indicator. They are expected to slow from 0.9-percent growth in October to a still strong 0.5 percent in November. Core orders are now rising at their fastest pace since 2011, suggesting that business confidence and investment remain strong. Have a great week! - [Tweet](https://twitter.com/share) ### Subscribe via Email ![TMO\_IMO\_615x408\_sidebar](https://blog.commonwealth.com/hs-fs/hubfs/TMO_IMO_615x408_sidebar.png?width=1033&height=686&name=TMO_IMO_615x408_sidebar.png "TMO_IMO_615x408_sidebar") [Episode 20](https://vimeo.com/1201911815/0f4f028be9?share=copy&fl=sv&fe=ci) June 17, 2026 [Episode 19](https://vimeo.com/1191658257/1b43ce84dd?share=copy&fl=sv&fe=ci) May 13, 2026 [Episode 18](https://vimeo.com/1183174918/e227cf7d80?share=copy&fl=sv&fe=ci) April 15, 2026 [Episode 17](https://vimeo.com/1174554734/636f0f7aba?share=copy&fl=sv&fe=ci) March 18, 2026 [Episode 16](https://vimeo.com/1163757312/bc2f802d74?share=copy&fl=sv&fe=ci) February 11, 2026 [More](https://learn.commonwealth.com/monthly-media-placements) [![Insights\_CTA\_IMO\_233x400-1](https://no-cache.hubspot.com/cta/default/295024/interactive-187935228457.png)](https://blog.commonwealth.com/hs/cta/wi/redirect?encryptedPayload=AVxigLI8AVF8ThdYvQDZtUnwH2m19XOANpjCQNqpzownMgCSXhNtvRAFVWExfVocjUt%2BhgW7H8Ak3Jp1as95OzeY5Li%2BKC5EocMML17%2FzI%2BdF2%2F%2Flz776YWiaUEsoT9vMeWUg6e0Riwi3r4L3UHKBC9LDxdbwtXfDISQWQU6XBhUiqcVgaAN2G%2BbQfF4x0f2m%2FXLu8klTK2tqOK%2FP5g%3D&webInteractiveContentId=187935228457&portalId=295024) ### Hot Topics Select Category Ask Brad Commentary Economic Risk Factor Updates Economics Lessons Market Thoughts Videos In the News Investing Market Updates On My Bookshelf Politics and the Economy [![New Call-to-action](https://no-cache.hubspot.com/cta/default/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf.png)](https://cta-redirect.hubspot.com/cta/redirect/295024/5f46d9ce-4d40-495c-a126-d4502b647bbf) ### Archives - 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