Economic Update, October 31 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Really, there is no normal. There’s only change and resistance to it and then more change.” – Meryl Streep WEEKLY TIP               If you are newly married and don’t have a will, why not create one? It is a thoughtful and very responsible move. WEEKLY RIDDLE              There is one question that nobody can possibly answer “yes” to with 100% honesty. What is that question?      Last week’s riddle: Ray pulls out of his driveway and immediately drives at 55 miles per hour, but he is not cited even though a police car sees him. Why?   Last week’s answer: He lives on a major road, and the speed limit on that road is at least 55mph.           October 31, 2016     ECONOMY EXPANDS 2.9% in THIRD QUARTER After just 1.4% growth in Q2, this was welcome news. Surging exports and greater inventory investment and federal spending made Q3 the best quarter for the economy in two years, according to the Department of Commerce. The federal government’s core PCE price index was up 1.7% for the quarter versus 1.8% in Q2.1    CONSUMER CONFIDENCE INDICES DESCEND Last week, the Conference Board’s gauge of household confidence came in at 98.6 for October, down from 103.5 in September. The University of Michigan’s final October consumer sentiment index slipped to 87.2 from its prior mark of 87.9.2     PENDING HOME SALES ReBOUND The National Association of Realtors noted a 1.5% gain in housing contract activity in September, following a 2.5% downturn in August. The August S&P/Case-Shiller home price index...