Although the Institute for Supply Management’s (ISM) non-manufacturing index dropped 2.7 points to 57.4 in November, it still remains in healthy expansionary territory. All of the main subcomponents declined, with new orders seeing the largest loss, followed by employment, prices paid and business activity. These moves partially reversed the hurricane-induced gains that materialized in the previous two months.

The Institute for Supply Management (ISM) index of manufacturing fell 0.5 points to 58.2. Nevertheless, the index remains well in expansionary territory — a fifteenth consecutive month of growth. Fourteen of the eighteen manufacturing industries reported expansion in November. The report details were mixed, with declines in the components previously…

Real personal income rose 0.3% in October. In real terms, personal spending was up a soft 0.1%, following September’s robust, but downwardly revised, 0.5% increase. Prices rose 0.1% month-on-month in October and inflation pulled back to 1.6% year-on-year from 1.7% in September. Core prices rose 0.2% (m/m) in October, but core inflation was unchanged at an upwardly revised 1.4%. The personal saving rate edged up to 3.2% from 3.0% in September.

The U.S. economy is running at its full potential for the first time in a decade, a new milestone for an expansion now in its ninth year. The revised GDP grew at 3.3% in the third quarter of 2017. That means economic output was slightly above the maximum sustainable level of output as estimated by the nonpartisan Congressional Budget Office. In advanced stages of expansions output can exceed potential and cause the economy to overheat.

U.S. consumer confidence index increased to 129.5 in November from 126.2 in October, which was already the highest level in 17 years. Consumers are more confident than they have been since the early 2000s, as unemployment hits record lows and the stock market continues to hit record highs. Increasing numbers of U.S. consumers feel that business conditions are better and jobs are plentiful, just as the unemployment rate dropped to 4.1% in October and the stock market is repeatedly hitting all-time highs.

New home sales rose 6.2% in October to a 685,000-unit annual pace, following a revised 14.2% rise in September. Sales of new homes in the Northeast and Midwest were large drivers of October sales, although they are the smallest regions for new home sales and often greatly influenced by atypical swings in the weather. The increases bring new home sales to a new cycle high and are somewhat surprising given concerns about the lack of inventory.

Existing home sales rose 2.0% m/m to 5.48 million (annualized) in October, following a downwardly-revised 0.4% increase in September. Gains were broad-based among the segments, with both single-family and condo/co-op sales rising. Activity improved among all four regions, with the Northeast leading the way. The inventory of homes available for…

Housing starts rebounded to a 1.29 million-unit pace in October from 1.14 million in September, when hurricanes halted some construction. Building permits, a good forward looking indicator of starts, also surprised to the upside. Activity in the South rebounded strongly, as hurricane-related rebuilding begun. …

The NFIB Index of Small Business Optimism fell 2.3 points in September to 103.0. Six of the index subcomponents fell on the month, three improved and one remained unchanged. The biggest declines were recorded among forward-looking indicators. …