***MERRY CHRISTMAS***

Retailers Need a Last-Minute Holiday Gift From Shoppers Discounts are back as stores try to entice cost-conscious customers. The strategy hinges on a final flurry of shopping this weekend.

(…) Higher discounts will come at the expense of profits, but chains don’t want to risk being stuck with excess holiday goods in the New Year. (…

Shoppers slowed their spending in November and early December, according to government data and research firms, raising the urgency of these final days. (…)

General merchandise sales for the week of Black Friday fell 5% compared with the same week in 2021, according to market research firm NPD Group, which tracks point-of-sale receipts. Sales were also less than the same week in 2019, the first time this year that general merchandise sales for one week fell below prepandemic levels, NPD said.

The declines deepened as December progressed with sales falling 2%, 5% and 7% in the weeks that ended Dec. 3, 10 and 17, according to NPD. (…)

Discounts peaked over the Black Friday weekend, fell in early December and began rising higher as the month drew to a close, according to DataWeave Inc., an analytics company that tracked prices across five categories, including apparel, shoes, electronics and furniture, on the websites of 35 U.S. retailers. Last year, discounts declined through early January after peaking during the Thanksgiving weekend. (…)

U.S. Jobless Claims Tick Up, Economy Grows Faster Than Previously Thought Third-quarter growth of 3.2% reflects stronger consumer spending amid tight labor market

New filings for unemployment benefits rose by a seasonally adjusted 2,000 last week but remain at historically low levels, the Labor Department reported Thursday. The 216,000 claims last week were in line with prepandemic levels, when the labor market was also tight, suggesting that employers are holding on to workers despite concerns about an economic slowdown.

In a separate report, the Commerce Department said third-quarter economic growth was stronger than previously estimated. The economy grew at a 3.2% seasonally adjusted annual rate, up from an earlier estimate of 2.9%, largely due to higher estimates of consumer spending. The third-quarter number snapped two consecutive quarters of contraction.

Continuing claims (black) have been rising steadily since early October and are now at pre-pandemic levels up from historically low levels. Laid off workers are no longer relocating easily.

U.S. Sales Managers See Continuing Growth, but Prices Rise Fast Again in December

Business Confidence among sales managers continued its fall back from the more optimistic views expressed in October, to significantly more cautious views on the likelihood of growth in economic activity over the next few months, including of course the festive season.
The Sales Managers Index, summarising trends in sales growth, confidence and staffing, consequently dipped below the levels registered in October and November, although remaining above the 50 “no growth” level.
The most negative aspect of the December data is without doubt the Prices Index, which continues to reflect significant price increases across many product and service sectors. (World Economics)

LEI for the U.S. Declined Again in November

The Conference Board Leading Economic Index® (LEI)for the U.S. decreased by 1.0 percent in November 2022 to 113.5 (2016=100), following a decline of 0.9 percent in October. The LEI is now down 3.7 percent over the six-month period between May and November 2022—a much steeper rate of decline than its 0.8 percent contraction over the previous six-month period, between November 2021 and May 2022. (…)

“Only stock prices contributed positively to the US LEI in November. Labor market, manufacturing, and housing indicators all weakened—reflecting serious headwinds to economic growth. Interest rate spread and manufacturing new orders components were essentially unchanged in November, confirming a lack of economic growth momentum in the near term.”

The annual growth rate of the US LEI declined further in November

The trajectory of the US LEI continues to signal a recession

The chart illustrates the so-called 3D’s rule which is a reliable rule of thumb to interpret the duration, depth, and diffusion – the 3D’s – of a downward movement in the LEI. Duration refers to how long-lasting a decline in the index is, and depth denotes how large the decline is. Duration and depth are measured by the rate of change of the index over the last six months. Diffusion is a measure of how widespread the decline is (i.e., the diffusion index of the LEI ranges from 0 to 100 and numbers below 50 indicate most of the components are weakening).

The 3D’s rule provides signals of impending recessions 1) when the diffusion index falls below the threshold of 50 (denoted by the black dotted line in the chart), and simultaneously 2) when the decline in the index over the most recent six months falls below the threshold of -4.0 percent. The red dotted line is drawn at the threshold value (measured by the median, -4.0 percent) on the months when both criteria are met simultaneously. Thus, the red dots signal a recession.

The LEI has now declined for 9 consecutive months (-6.5% a.r.). That has only happened 5 times since 1959. On each occasion, the economy was either heading into a recession or already in one.

U.S. Population Growth Remains Sluggish Despite Uptick This Year America’s population grew 0.4% this year, new Census Bureau figures show, continuing historically slow growth that has added pressure to a tight labor market.

The slight uptick, in the third year of the pandemic, was still greater than the unprecedented low rate of 0.1% recorded in 2021.

The U.S. added 1.3 million people in the year that ended July 1 for a total population of 333.3 million. That included 245,000 more births than deaths, a surplus that has long supplied much of the nation’s growth. The other component, which measures people moving in and out of the country, grew by one million.

Population growth had been slowing before the pandemic, but had averaged more than two million a year over the last decade. As recently as 2016, the U.S. grew by 2.3 million people. (…)

More broadly, the population in the South grew by 1.1%, while the West gained 0.2%. The Midwest lost 0.1% and the Northeast declined 0.4%. (…)

Kenneth Johnson, a demographer at the University of New Hampshire, noted that 24 states had more deaths than births in the year covered by the report. “That is a staggeringly high number,” he said.

Before the pandemic, Mr. Johnson said it was unusual for even five states to record what demographers call a natural decrease between years.

“Clearly, Covid produced most of this natural decrease by pushing death rates and the number of deaths up,” he said. “But, long-term birthrates were already declining and deaths were rising prior to Covid.”

With so many states recording more deaths than births, Mr. Johnson said growth will have to come from other states or other nations. “For many states, if they are going to grow, it must be through migration,” he said.

Despite slow growth, projections by the Census Bureau and the United Nations show the U.S. is expected to continue growing at least through the middle of the century. By comparison, populations have begun to shrink in Japan and many Eastern European nations, as well as Germany, Italy, Greece and Portugal. China’s population of 1.4 billion might have peaked, growing just 0.03% in 2021. (…)

About 80% of last year’s population growth came from arrivals from abroad, up from about 40% a decade ago. (…)

In a separate report released Thursday, the Centers for Disease Control and Prevention said life expectancy in the U.S. fell again last year to the lowest level since 1996, after the pandemic and opioid overdoses drove deaths higher. Covid-19 was the third-leading cause of death for the second consecutive year, helping cut life expectancy to 76.4 years in 2021, down from 78.8 years before the pandemic in 2019.

Chipmaker TSMC in talks with suppliers over first European plant

Japan Inflation Hits Four-Decade High, Pressuring Central Bank in 2023 Japan’s core inflation rose at the fastest pace in nearly 41 years in November, fueling market speculation that the Bank of Japan would look to tighten monetary policy.

Core consumer prices—a measure that covers all prices except fresh food—rose 3.7% from a year earlier in November, the fastest pace since December 1981, government data showed Friday. (…)

Japan’s consumer prices excluding fresh food and energy prices rose 2.8% from a year earlier in November, well above the BOJ’s 2% target. That suggests inflation isn’t driven mainly by higher prices for imported oil and natural gas. (…)

Some are skeptical that Japan’s inflation picture has really changed—including the central bank itself. Its policy board expects the core inflation measure to fall to 1.6% in the fiscal year starting April 2023 because the prices of oil and some other commodities have stopped rising. (…)

(Goldman Sachs)

China Estimates Covid Surge Is Infecting 37 Million People a Day Nearly 18% of the population likely contracted the virus in the first 20 days of December.

  Scott Minerd, Guggenheim Partners’ Investment Chief, Dies at Age 63 An early member of the firm, he helped shape its growth from a startup to the manager of more than $218 billion in assets.

Mr. Minerd, 63 years old and a committed weightlifter known to bench press more than 400 pounds, died during his daily workout, the firm said. (…)

“As an asset manager, I’ve come to view conventional wisdom as the surest path to investment underperformance,” Mr. Minerd wrote in a biographical summary. (…)

In a 2020 interview with the Los Angeles Times, he took aim at elite universities, including the University of Pennsylvania. “These schools have huge endowments, and why are they not focusing their endowment on advancing a cause of essentially free education or at least education that provides complete support for people below certain income levels?” he asked. Mr. Minerd said he wouldn’t make donations going to “bricks and mortar and making the place look better when people who would be qualified to come there can’t afford to do it. And, of course, if we had more equal access to education, it would help address some of the issues around race and poverty.” (…)