It seems that everybody wanted to get their news out at the same time today. Today's article will discuss reports released in the past twenty-four hours concerning the October status of Consumer Installment Credit and New Home Sales, the November Employment Situation, the November value of the Columbia University leading inflation index, and the preliminary December reading of the University of Michigan's Consumer Sentiment Index.

To start things off: yesterday afternoon the Federal Reserve released its report on consumer installment credit for the month of October. It appears that consumers in general have re-examined their personal financial situations and collectively decided that they can afford to take on increasingly greater amounts of debt. Outstanding consumer installment credit grew at a 12.7% seasonally adjusted annual rate in October. This followed a relatively small growth rate of 5% in September. All types of credit expanded more rapidly in October than in September. October's growth in outstanding credit pushed the figure for the total amount of credit outstanding over the trillion dollar level for the first time. The total outstanding consumer debt at the end of October was $1,004,400,000,000.00. Wouldn't you like to be collecting the interest on that amount?

This morning the Commerce Department's Bureau of the Census reported that sales of new one-family houses dropped for the third straight month in October to a seasonally adjusted annual rate of 673,000. This is 2.75% below the revised September rate of 692,000 and 4.81% below the rate for October 1994. Today's announced figure surprised industry analysts, who had expected a reading between 700,000 and 750,000. Today's new home sales data is consistent with other recent trends in the homebuilding/homebuying sector. Privately owned housing starts have been declining for three months, and building permits and existing home sales both fell in October for the first time in several months.

Also this morning, the Bureau of Labor Statistics of the Labor Department released its report on the employment situation for November. Between October and November the percentage of unemployed persons grew from 5.46% to 5.61% of the civilian labor force. During the same period, total non-farm employment grew by 166,000. According to today's report, a portion of the payroll employment increase was attributable to two technical factors: a later-than-usual survey week, and the normal semi-annual updating of the factors used in the seasonal adjustment process. The combined effect accounted for about 70,000 of the over-the-month increase. This would make the unadjusted gain for November be 96,000. This compares with an average monthly gain of 145,000 over the preceding 10 months.

Moving right along, Columbia University today released the November value for its leading inflation index. The November figure declined to 103.3 from an October reading of 104.4. I read somewhere that this index is a favorite of Federal Reserve Chairman, Alan Greenspan. Maybe the decline from October to November will convince him to loosen up on interest rates at the December 19 Federal Open Market Committee meeting.

Finally, today the University of Michigan released the preliminary estimate of its Consumer Sentiment Index for the month of December. Today's value was 90.5, a gain of 2.3 over November's final reading of 88.2. This indicator hit an intermediate term peak of 94.4 back in July. Since then it has been fluctuating in a range between 88.2 and 91.7.

Summing up, I'll give consumer credit a plus, the housing sector a minus, employment a minus, inflation a minus, and sentiment a plus. So the score is: Slowdown 3 - Expansion 2. The bond market also seems to have come down slightly to the slowdown side. After fluctuating over a wide range today, the price of the 30-year T-bond closed with a slight gain.

Byline: Lafferty (MF Merlin)