5 Key Headlines in 3 Quick Minutes…
1. “U.S. Core Capital Goods Orders Rebound as Economy Eyes Strong End to 2024”
In November, new orders for key U.S.-manufactured capital goods increased significantly, reflecting strong demand for machinery and indicating a robust economy as 2024 ends. The Commerce Department reported a 0.7% rebound in non-defense capital goods orders, excluding aircraft, following a slight decline in October. Shipments also rose for the second consecutive month, showing a 0.4% year-on-year increase. This positive data, along with recent strong consumer spending figures, suggests the economy’s resilience and led the Federal Reserve to project fewer interest rate cuts in 2025. Despite some declines in transportation equipment and commercial aircraft orders, machinery orders saw marked increases. The Fed recently reduced its benchmark interest rate but foresees limited further cuts due to ongoing economic strength and inflation concerns. The Atlanta Fed predicts a 3.1% growth rate for the fourth quarter, mirroring third-quarter growth. Overall, while some areas like aircraft faced challenges, the growth in core capital goods orders signals firm business investment intentions.
Reuters
2. “American Consumers Feeling Less Confident in December, Conference Board Says”
In December, American consumer confidence significantly declined, according to the Conference Board’s report. The consumer confidence index dropped to 104.7 from 112.8 in November, defying analysts’ expectations of a rise to 113.8. This index reflects both the current economic assessment and the outlook for the next six months. Notably, short-term expectations for income, business, and the job market fell over a dozen points to 81.1, where a reading below 80 could indicate an upcoming recession. Despite the decline in confidence, consumer spending at retail stores increased by 0.7% in November, showing that consumers still contributed positively to the economy. Another report mentioned a 0.4% rise in consumer spending from October to November. The U.S. economy grew by a strong 3.1% annual rate in the last quarter, driven largely by consumer demand, which accounts for nearly 70% of U.S. economic activity.
Associated Press
3. “Party City Files for Bankruptcy Again a Day After Revealing It’s Going Out of Business and Closing All 700 Stores”
Party City has filed for Chapter 11 bankruptcy protection, just after announcing the permanent closure of all 700 of its stores, affecting 12,000 employees. This follows just one year after the company emerged from a previous bankruptcy with significant debt restructuring. The decision to wind down operations was driven by inflation, high competition, and economic challenges. The company will continue trading until February 28, offering significant sales during this period. Meanwhile, The Container Store has also filed for bankruptcy due to poor sales and significant debt, although it plans to continue operations. The prediction is that around 45,000 physical retail stores may close within the next five years due to similar financial pressures.
The Sun
4. “U.S. Accuses Rocket Homes of ‘Illegal Kickbacks’ in Mortgage Scheme”
The Consumer Financial Protection Bureau (CFPB) has accused Rocket Homes, a real estate company, of engaging in an illegal kickback scheme that violated federal law. According to CFPB Director Rohit Chopra, Rocket Homes’ actions discouraged homebuyers from comparison shopping and obtaining the best mortgage deals. The scheme allegedly involved undisclosed financial arrangements that compromised the integrity of the mortgage process. This development underscores the importance of transparency and fair practices in the real estate and mortgage industries, areas of concern for small business owners involved in property investments or real estate services.
Reuters
5. “Oil Prices Ease on Surplus Concerns, Dollar Strength”
Oil prices edged lower on Monday due to concerns about a potential supply surplus in the coming year and a strengthened U.S. dollar. In thin trading, these factors contributed to the easing of oil prices, which can have implications for various sectors of the economy, including transportation and manufacturing. Fluctuations in oil prices affect operational costs for small businesses, particularly those reliant on logistics and shipping. Monitoring these trends is essential for budgeting and financial planning.
Reuters