Chandler Bond Market Review

Economic Roundup November 2013

Consumer Prices

In September, overall CPI inflation rose to 1.2% on a year-over-year basis from 1.5% in August.  The year-over-year Core CPI (CPI less food and energy) fell slightly to 1.7% from 1.8%.  The core inflation rate is still trending below the Fed’s long-term goal of 2.0% and remains below the trigger rate for policy action of 2.5%.

Retail Sales

In September, Retail Sales rose 3.2% on a year-over-year basis down from 4.6% in August.  On a month-over-month basis, Retail Sales fell 0.1% in September which was slightly below the consensus forecast.  At the core level (excluding autos and gas), retail sales rose 0.4% in September on a month-over-month basis.

Labor Markets

The October employment report was better than expected as payrolls rose by 204,000 versus the 120,000 consensus estimate.  However, the unemployment rate edged up to 7.3% from 7.2%, reflecting a rise in temporary layoffs during the government shutdown.  Net revisions for job growth in August and September were +60,000.  Average nonfarm payroll growth over the past 3 months has been about 201,000.  Private payrolls increased 212,000 in October while government jobs declined 8,000.

Housing Starts

Single-family housing starts rose 7.0% in August to 628,000 from 587,000 in July.  Housing permits fell 3.8% in July. Recent housing data has been mixed but mostly favorable.

 Credit Spreads November 2013

Economic Data November 2013

 

 

 

RISKS AND OTHER IMPORTANT CONSIDERATIONS

This report is provided for general information purposes only and should not be construed as specific legal, tax, or financial planning advice. All opinions and views constitute judgments or relevant information as of the date of writing and such information may become outdated or superseded at any time without notice. This report is not intended to constitute an offer, solicitation, recommendation or advice regarding any securities or investment strategy. This information should not be regarded by recipients as a substitute for the exercise of their own judgment. Fixed income investments are subject to interest, credit, and market risk. Interest rate risk: the value of fixed income investments will decline as interest rates rise. Credit risk: the possibility that the borrower may not be able to repay interest and principal. Low rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk. Market risk: the bond market in general could decline due to economic conditions,especially during periods of rising interest rates.

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