* Consumer income growth remains moderate. While some consumers are clearly in financial trouble, due to high indebtedness and low income growth, the average consumer is in better financial shape heading into the new year.
* But concerns about how bad things may get this winter and spring are leading to spending growth trailing income growth.
* Inflation pressure continues to mount and probably will continue, despite a weak economic environment. Altogether, this is a picture of an economy in slow mode, but probably not grinding to a halt, let alone slipping into reverse.
Friday, December 28
10:00am Help-Wanted Advertising Index (The Conference Board)
Labor market indicators have been reflecting some slowing in the pace of hiring (down below 100,000 jobs in November). Is this changing at all?
Tuesday, January 1
HAPPY NEW YEAR
Thursday, January 3
Vehicle Sales
Consumer buying was relatively flat through November. The 2008 models probably did no better in December, nor will they improve through the post-holiday period. In fact, the pace might even diminish further if consumer expectations continue to drop.
Friday, January 4
8:30am The Employment Situation (Bureau of Labor Statistics)
After opening up only 94,000 jobs in November, the pace might have slowed a little more in December. Also very important is whether the 3.8 percent (year over year) increase in average hourly earnings slowed. Fear of weaker job and income gains is exactly what has caused consumer expectations to wilt.
BY THE END OF THE WEEK
As the year comes to a close, it's time to take stock. It has not been the best of years. Nor has it been the worst. Despite energy price increases and housing problems (not just domestically), the global economy probably grew by a little more than 4.5 percent. Global stocks (BBC Global 30) were up by about 7 percent. Most of the gain was in the first half of the year, with stock indices more flat to declining through a turbulent second half of the year.
The concerns going into the new year include, but clearly aren't limited to, still higher energy prices, with some impact of prices elsewhere, and continued financial market turmoil. Global economic and trade growth are likely to remain moderate to strong, but probably not up to the pace set in 2007. This suggests profit growth will be slower, which in turn may point to less than 7 percent average gains in stocks around the global exchanges. In short, it was tough to make money in 2007 (is it ever easy). It will be tougher still in the new year.
