11/26: MetroIntelligence Economic Update by P. DUFFY

Early Markit Flash PMI Index shows overall economic improvement in November

In November, the IHS Markit Flash U.S. Composite Output Index rose to 51.9 (50.9 in October), a 4-month high. For manufacturing, that sector’s PMI rose to 52.2 (51.3 in October), a 7-month high and well above the lows of late summer. For services, its own PMI rose to 51.6 (50.6 in October), a 4-month high.



Consumer sentiment remains consistently high in late November survey

The November 2019 consumer sentiment figure of 96.8 was nearly identical to the average level recorded since the start of 2017 (97.0). Personal spending will be energized by record favorable evaluations by consumers of their personal financial situation, with gains expected across the entire income distribution, net increases in household wealth, the renewed appeal of price discounting, and reduced mortgage rates.



October Fed meeting minutes predict slower but continued expansion ahead

The projection for U.S. real GDP growth prepared by the staff for the October FOMC meeting was revised down a little for the second half of this year relative to the previous projection. Output was forecast to expand at a rate a little above the staff’s estimate of its potential rate of growth in 2019 and 2020 and then to slow to a pace slightly below potential output growth in 2021 and 2022. The unemployment rate was projected to be roughly flat through 2022 and to remain below the staff’s estimate of its longer-run natural rate.