Courtesy of StockTiger
Sales of existing homes rose to a seasonally adjusted rate of 4.42 million during the final month of the year, marking a 5 percent increase over the downwardly revised 4.39 million homes sold in November and a 4 percent increase over the 4.25 million homes sold in October. The number of homes sold in December 2011 also marked a 3.6 percent increase over the 4.45 million homes sold during the same month one year ago. The December upswing closed out an altogether positive year for existing home sales, which rose 1.7 percent in 2011 to 4.26 million. “The pattern of home sales in recent months demonstrates a market in recovery,” NAR chief economist Lawrence Yun said in a statement. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”
U.S. industrial output rose at a slightly slower than expected pace of 0.4 percent month-over-month in December, with manufacturing output advancing by a solid 0.9 percent. The previous two months’ readings were downwardly revised. Mining output was up 0.3 percent, while utilities output fell 2.7 percent. Capacity utilization rose 0.3 points to 78.1 percent. Business equipment production climbed 0.7 percent and production of industrial equipment was up 1.5 percent.
The producer price inflation report released by the Labor Department showed that the producer price index fell by 0.1 percent in December. The year-over-year rate of producer price inflation slowed to 4.8 percent, the smallest increase in about a year. However, excluding food and energy, core producer prices rose 0.3 percent, the biggest increase in 5 months. The annual rate of core producer price inflation rose to 3.1 percent. Pipeline inflationary pressure is easing, with core intermediate prices falling by 0.5 percent.
Today’s chart provides some further perspective into the past and future trends of 12-month, as-reported, inflation-adjusted S&P 500 earnings. Today’s chart illustrates how earnings declined over 92% from its Q3 2007 pre-financial crisis peak and then, beginning in Q1 2009, quickly surged back to near record levels. This begs the question; will corporate earnings make new record highs? As today’s chart illustrates, based on the latest S&P 500 earnings estimates (see red line), earnings are expected to make new, inflation-adjusted record highs during the first half of this year. Considering the current global economic environment, this is indeed quite an achievement.
