11/18/2024 MUNDO WALL STREET
Economic Summary: Week of November 11 to 18
1. Retail Sales Surge Amid Holiday Preparations
Retail sales jumped by an impressive 6.5% month-over-month, marking a strong start to the holiday shopping season. Consumers flocked to take advantage of early holiday discounts, with electronics, apparel, and home goods leading the charge. Online retailers also reported a significant boost, with e-commerce sales growing 10% year-over-year, reflecting shifting shopping trends.
This surge is a positive signal for economic growth, suggesting that households remain willing to spend despite higher interest rates and inflationary pressures. However, economists warn that much of this spending is being financed through credit, as credit card balances reached an all-time high of $1.08 trillion, raising concerns about sustainability in the coming months.
2. Housing Market Stabilizes Despite High Mortgage Rates
The housing market showed signs of resilience, with existing home sales increasing by 2% in October, marking the first uptick in months. While mortgage rates remain elevated at an average of 7.3% for a 30-year fixed loan, prospective buyers have been exploring creative financing options such as rate buydowns and adjustable-rate mortgages.
This recovery is especially noticeable in smaller metro areas, where prices have softened, making homes slightly more affordable for first-time buyers. Analysts suggest that continued wage growth and a strong labor market are helping support housing demand, even in a challenging rate environment.
3. U.S. Employment Market Remains Strong
The labor market continues to exhibit strength, with 215,000 jobs added in October, surpassing expectations. The unemployment rate held steady at 3.6%, reflecting ongoing resilience despite tighter monetary policy.
Notably, the labor force participation rate ticked up to 63%, its highest level since 2020, as more workers, including women and older adults, re-entered the workforce. This shift is particularly evident in industries such as healthcare, hospitality, and manufacturing, which are actively hiring to meet seasonal and long-term demand.
Wage growth remains steady, increasing 4.2% year-over-year, providing workers with some cushion against inflation. However, economists caution that the Federal Reserve will closely monitor these gains to assess whether they contribute to persistent price pressures.
4. Global Oil Prices Dip as Supply Concerns Ease
Global oil prices dropped below $80 per barrel this week, their lowest level in over five months. The decline is driven by easing geopolitical tensions in the Middle East, coupled with increased production from the U.S. and other key suppliers.
This decline is welcome news for consumers, with average gasoline prices falling to $3.52 per gallon, down from $3.84 in October. Lower energy costs are expected to help moderate inflation further and support consumer spending during the critical holiday season.
5. Stock Market Rebounds Amid Inflation Optimism
The U.S. stock market posted strong gains this week, buoyed by optimism around inflation cooling. The CPI (Consumer Price Index) data for October showed a year-over-year increase of 3.2%, slightly lower than the previous month, reinforcing expectations that the Federal Reserve may hold interest rates steady for the remainder of 2024.
The S&P 500 closed the week up 2.1%, driven by strong performances in consumer discretionary and technology stocks. Meanwhile, the NASDAQ surged 2.8%, reflecting investor confidence in growth-oriented sectors as inflation pressures ease.
6. Cryptocurrency Stabilizes Following Volatility
After weeks of volatility, the cryptocurrency market stabilized, with Bitcoin trading around $88,000, supported by growing interest from institutional investors. The SEC’s recent decision to delay rulings on several spot Bitcoin ETF applications added some uncertainty, but analysts remain optimistic about regulatory approval in early 2025.
Altcoins also experienced modest gains, driven by optimism about blockchain adoption in traditional finance sectors.
Looking Ahead
The economic data for the week ending November 18 points to a cautiously optimistic outlook. Retail sales and employment growth underscore the resilience of the U.S. economy, while moderating inflation and falling energy prices provide a more favorable environment for consumers and businesses alike.
As the holiday season accelerates, all eyes will be on consumer behavior, further housing market developments, and whether the Federal Reserve will maintain its current stance on interest rates.
