Retail sales unexpectedly stalled in December, suggesting consumers provided less fire power to the economy as the year drew to a close. The data indicated that there are signs discretionary spending is less robust for lower income Americans, the result of a higher cost of living that may not be accurately measured in the data.
Health care premiums are surging so are home and car insurance premiums amplified by various tax increases in real estate and personal property. These are large expenditures for any household, expenditures that are rising over a double-digit rate that greatly impacts most household’s budget and outlook.
Delinquencies on credit cards in fourth quarter rose to the highest level since 2017. According to the NY Fed, the share of credit card balances at least 90 days past due climbed to 12.7%, the largest since 2011.
And then there is student loan debt. The data suggest that 16.3% of student loan debt became delinquent in the fourth quarter, the biggest increase on record going back to 2004.
Treasuries rallied across the curve on the data, suggesting that rate cuts are indeed plausible. However, the issues facing the economy will not be immediately resolved by lowering interest rates by 25 or 50 bps. They are more systemic
Equites were relatively quiet.
Today the delayed unemployment data is released. Non-farm and private sector payrolls are expected to increase by 67k and 70k, respectively, average hourly earnings rising by 0.3%, a 34.2 hour work week, a 4.4% unemployment rate and 62.4% labor participation rate.
Friday the CPI is posted.
Both data points can influence psychology and stock/bond prices.
Last night the foreign markets were mixed. London was up 0.75%, Paris down 0.12% and Frankfurt down 0.19%. China was up 009%, Japan up 2.28% and Hang Seng up 0.31%.
Futures are flat ahead of the job’s data. The 10-year is up 3/32 to yield 4.14%.
