Comerica Economic Weekly, November 20, 2023

Bill Adams


Waran Bhahirethan

Economic Chart

Preview of the Week Ahead

This edition of the Comerica weekly previews the next two weeks’ economic releases. Wishing all our clients and colleagues a safe and Happy Thanksgiving!

The minutes of the Fed’s November 1 meeting will likely show FOMC members see a path clearing toward interest rate cuts in 2024. Existing home sales likely edged lower in October. Sales will likely fall in November after mortgage rates’ October surge, then recover in the winter months with mortgage rates coming back down and seasonal comparisons easier. 

Consumer sentiment likely improved in November, since Americans’ concerns that the Israel-Hamas war would raise gas prices were not realized—in fact, prices at the pump fell to the lowest since January this month. House prices likely rose faster in year-over-year terms in September. 

Personal income and expenditures likely rose more slowly in October after strong growth in the third quarter; the Personal Consumption Expenditures Price Index likely slowed, too, paralleling trends in the month’s CPI report. The ISM PMI surveys likely showed manufacturing activity picked up in November after the end of the UAW strike. Vehicle sales likely held steady in November.

The Week in Review

CPI, retail sales, and industrial production were all cooler than expected in October, pushing medium- and long-term interest rates lower as financial markets priced in higher conviction that the Fed would lower interest rates in 2024. The CPI was unchanged in October, undershooting consensus forecasts for a small increase. Gasoline prices fell 5.0% as domestic crude production rose to a new record high. Food prices rose 0.3%. The core CPI basket excluding food and energy rose 0.2%, also undershooting the consensus forecast. Retail and food service sales fell 0.1%, with gasoline station sales down 0.3%, reflecting lower prices, and motor vehicle and parts sales down 1.0% after a 1.1% increase in September. Excluding these and other volatile categories, core or “control” retail sales rose a moderate 0.2%. Industrial production fell 0.6%, worse than the consensus forecast for a 0.4% decline. The culprit was a 16% drop in motor vehicle production and a 6% drop in motor vehicle parts production during the UAW strike. 

But even after the strike ended, jobless claims continue to rise. Continued claims were up 9% from the end of September to the first week of November, and are at the highest since late 2021. The ten-year Treasury yield briefly touched 5% in mid-October, and has pulled back to 4.4% in mid-November on these and other soft recent data releases, while the two-year Treasury yield has fallen from 5.2% to 4.9%. 

Also helping push long-term Treasury yields down, the Treasury’s fiscal deficit narrowed to $66.6 billion in October from $171.0 billion in September. On a twelve-month rolling basis, it hit $2.26 trillion in the year through July, and has narrowed to $1.67 trillion in the year through October.

Week Ahead Chart
Week Ahead Chart

For a PDF version of this publication, click here: Comerica Economic Weekly, November 20, 2023(PDF, 148 KB)

The articles and opinions in this publication are for general information only, are subject to change without notice, and are not intended to provide specific investment, legal, accounting, tax or other advice or recommendations. The information and/or views contained herein reflect the thoughts and opinions of the noted authors only, and such information and/or views do not necessarily reflect the thoughts and opinions of Comerica or its management team. This publication is being provided without any warranty whatsoever. Any opinion referenced in this publication may not come to pass. We are not offering or soliciting any transaction based on this information. You should consult your attorney, accountant or tax or financial advisor with regard to your situation before taking any action that may have legal, tax or financial consequences. Although the information in this publication has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its timeliness or accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Comerica Economic Commentary Newsletter Sign-up

November 20, 2023
Bill Adams photo

Bill Adams

SVP, Chief Economist
Comerica Bank
Waran Bhahirethan photo

Waran Bhahirethan

VP, Senior Economist
Comerica Bank

Related Content