• 2018: An Unusually Challenging and Unsettled Time, with Likely Tumultuous Markets, a Non-Recovering Economy, Political Turmoil and Election Surprises
• Faltering Consumer Outlook and Tightening Liquidity Conditions Are Inconsistent with Shrinking Unemployment and Surging Holiday-Season Sales
• Beyond Data Disruptions, Booming Headline Economic Activity Has Been Fueled by One-Time Insurance Payments and Liquidation of Savings, Not by Regular or Sustainable Income Growth
• December 2017 Marks the Tenth Anniversary of the Formal Onset of the 2007 Recession
• Economic Expansion Is Defined as Growth Beyond the Prior Business-Cycle Peak
• Key Headline Measures of Consumer and Industrial Activity Still Remain Shy of Recovering Pre-2007 Recession Peaks
• Trade Deficit Has Turned Increasingly Negative for Fourth-Quarter GDP

• New-Home Sales Reporting-Illusion Reflected Absurd Volatility: Multi-Decade-High Surge of 17.5% in November 2017 Sales Was a Gimmick; Considering Massive Downside Revisions, Recast Sales Boom Contracted by 1.9% (-1.9%);
Headline Detail Still Shy by 47.2% (-47.2%) of Recovering Pre-Recession Peak
• Boosted Heavily by Unstable Seasonal Adjustments, November Existing-Home Sales Jumped 5.6% Month-to-Month, Still Holding Shy by 20.0% (-20.0%) of Recovering Its Pre-Recession Peak
• As Hurricane-Disruptions Work Out of the New Orders System, Real Annual Durable Goods Growth Slowed Sharply, Ex-Volatile Commercial Aircraft
• Real New Orders for Durable Goods Remained Down by 9.7% (-9.7%) from Recovering Its Pre-Recession Peak
• Third Estimate of Real Third-Quarter 2017 GDP Revised to 3.16% (Previously 3.30%), versus 3.06% in Second-Quarter 2017
• Second Estimate of Third-Quarter Gross National Product (GNP) Revised to 3.65% (was 3.47%); Gross Domestic Income (GDI) Revised to 2.03% (was 2.53%)
• Better-Quality Economic Measures Still Show No Full Recovery from the Collapse into 2009 and No Economic Expansion

• Stocks Continue to Boom, with Extreme Downside Vulnerability to Near-Term Negative Economic Surprises and Otherwise
• Pending Run on the U.S. Dollar Should Mirror a Flight into Gold and Silver
• Economic Reporting Does Not Reflect Costs of Destruction from Natural Disasters, but It Does Reflect Gains from Temporary Relief and Recovery Activity
• Freight Index Continued in Non-Recovered, Low-Level Stagnation
• Nonsense Volatility and Revisions Hit November 2017 Housing Starts, Amidst a Continued Likely Boost from Disaster Recovery
• Headline Gain of 3.3% Was 0.5% Net of Revisions • Activity Remained in Low-Level, Non-Recovered Stagnation, with Housing Starts Still Shy of Their Pre-Recession High by 42.9% (-42.9%) and Single-Unit Starts Shy of Recovery by 51.6% (-51.6%)
• Multiple-Unit Starts Recovered in 2015, but Have Fallen Back Since by 18.4% (-18.4%) from Their Pre-Recession Peak
• Building Permits Remained Shy of Recovery by 42.6% (-42.6%)

• Despite Mixed Headline Economic Numbers, Uncertainty Is Holding Back Real-World Business Activity
• Booming Retail Sales Reflected Complications with Non-Seasonal, Residual Hurricane Distortions Combined with Concurrent Seasonal Adjustments
• November 2017 Retail Sales Jumped by 0.79%, up by 0.40% Net of Inflation, On Top of Sharp Upside Revisions to September and October Activity
• Running Contrary to the Strong Retail Sales Report, November 2017 Consumer Goods Production Dropped by 0.39% (-0.39%) and Revised Sharply Lower in October, September, August, July and June
• November 2017 Total Industrial Production Rose 0.2% from an Unrevised, Hurricane-Distorted/Boosted October Production Level, in the Context of Sharp Downside Revisions to September and Earlier Activity
• Net of an Oil Production Boost from Hurricane Nate Recovery, November Industrial Production was “Unchanged” Month-to-Month, per the Fed
• Dominant Manufacturing Sector of Industrial Production Remained Shy of Recovering Its Pre-Recession Peak by 4.7% (-4.7%)
• November Manufacturing Showed 119 Months of Continuous Non-Expansion, the Longest Such Period in the 100-Year History of the Industrial Production Series; Second Worst: 96-Months of Post-World War II Retooling from War to Consumer Production; Third Worst: 88-Months of the First Down-Leg in the Great Depression

• Unable to Escape 2008, FOMC Boosted Rates a Quarter-Point, Nonetheless, Amidst Fed Projections of Lower Unemployment and a Stronger GDP
• Yet, Fundamentals Still Point to a Weaker Economy as Fed Chair Janet Yellen Described the Economic Outlook as “Highly Uncertain”
• Prospects for U.S. Economic and Financial-Market Activity Continued to Darken; Faltering Real Consumer Credit and Earnings Do Not Support the Purported Boom
• Amidst Downside Prior-Period Revisions, Fourth-Quarter 2017 Real Average Weekly Earnings Were on Track for Second Consecutive Quarterly Contraction
• Monthly and Annual Jumps in CPI and PPI Were Due to Gasoline Price Swings; Headline Inflation Gains Were Not Due to Strong or Over-Heating Economic Activity
• November 2017 CPI-U Monthly Inflation Jumped by 0.39% (Was 0.11%) Pulling Annual CPI-U Inflation Higher to 2.20% (Was 2.04%), with CPI-W at 2.32% (Was 2.06%) and ShadowStats at 9.9% (Was 9.8%)
• November 2017 Final-Demand PPI Inflation Monthly Gain of 0.44% Pulled Annual Gain to a 70-Month High of 3.07%, versus 2.79% in October 2017
• Continuing Monthly Jump of 0.44% in November PPI was Dominated by Gain of 0.98% in Goods Inflation (4.63% Energy Gain), Versus Gain of 0.17% in Services
• Inflation Will Soften November Real Retail Sales Growth versus Nominal Growth by 0.4% (-0.4%) Month-to-Month, 2.2% (-2.2%) Year-to-Year

• Private Surveying of November Labor Conditions Showed Continuing Annual Contraction and Ongoing Non-Expansion
• Still-Heavily-Distorted, November Unemployment Rates Notched Minimally Higher: U.3 Rose to 4.12% versus 4.07%, U.6 Rose to 7.96% from 7.91%, and the ShadowStats-Alternate Rose to 21.7% from 21.6%
• Hurricane-Warped Unemployment and Employment Household-Survey Details Face Near-Term Corrections with the January 5th Benchmark Revisions
• Low-Level Annual Payroll Growth Continued to Signal New Recession • Seasonal-Adjustment Gimmicks Bloated Headline Payroll Gains, where Unadjusted Payrolls Revised Lower but Adjusted Levels Revised Higher; Payroll-Survey Benchmark Revisions Loom for February 2nd
• Fourth-Quarter 2017 Real Merchandise Trade Deficit on Early Track for Worst Showing Since First-Quarter 2007
• October 2017 Nominal Balance of Payments Trade Deficit Increased by 8.6% versus September 2017, by 13.1% versus October 2016
• Shy of Recovering Its Pre-Recession Peak by 22.0% (-22.0%), Real Construction Spending Continued in Annual Decline, as Last Seen During the 2006 Housing Collapse
• Amidst Expectations of a December 13th FOMC Rate Hike, November 2017 M3 Annual Growth Eased Back to 4.6% from 4.8% in October, as Monetary-Base Annual Growth Jumped to a Four-Year High of 8.1%