US industrial production in October is projected to increase 0.2% vs. the previous month in tomorrow’s report from the Federal Reserve, according to The Capital Spectator’s median point forecast for several econometric estimates. The expected gain represents a substantial deceleration in growth relative to September’s 1.0% advance.
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● The Colder War: How the Global Energy Trade Slipped from America’s Grasp
by Marin Katusa
Interview with author via Yahoo Finance
“President Putin has clearly broken the [Sept. 5] truce agreement,” NATO Secretary General Jens Stoltenberg told Germany’s Bild newspaper but, thus far, traders don’t seem to care — perhaps pulling from the same playbook as earlier this year when Russia annexed Crimea.
But “the problem is going to get worse and it is going to get bloodier,” says Marin Katusa, chief energy strategist for Casey Research. “More importantly [Ukraine] is central to [Putin’s] theme of not only making Europe more dependent on Russian oil and natural gas but at the same time he is also expanding his output of energy to countries like China so he’s got a double-pronged approach.”
In his new book, The Colder War, Katusa examines Putin’s long-term strategy of returning Russia to global superpower status via strategic use of its primary weapon: Energy.
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Retail sales increased 0.3% in October, the Census Bureau reports — in line with expectations. The annual growth rate for spending slipped modestly, advancing 4.1% for the year through last month vs. 4.4% in the previous update. Nonetheless, today’s data shows that the consumption trend on Main Street remains comfortably in the 4%-plus range, which has prevailed since March. One reason for expecting that sales will remain on a moderate growth path: falling gasoline prices, which have provided a substantial boost to disposable income lately.
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The monthly housing numbers for October start rolling in next week, which will renew the focus on the key question: Is this crucial sector of the US economy still a risk factor for the business cycle? Recent data looks a bit more encouraging vs. the softer trend from earlier in the year, but housing’s growth remains sluggish compared with the robust gains in 2012 and 2013. For the moment, however, the worst fears have receded, although it’s still unclear if the trend will stabilize at a lesser growth rate. We’ll have a clearer picture of what lies ahead after the next batch of figures arrive, starting with next week’s update (Nov. 19) on new residential construction. Meantime, let’s review how the numbers stack up on three key indicators: new home sales, existing home sales, and housing starts, followed by a look at the outlook for prices.
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● Hiring in U.S. Picks Up as Workers Gain Confidence to Quit Jobs | Bloomberg
● German Economy Returns to Growth as France Beats Forecast | Bloomberg
● Obama, defiant, says immigration action ‘going to happen’ | The Hill
● Putin Berates US Over Sanctions Before G20 Meeting | VOA
● Oil set to fall further in ‘new chapter’ for markets: IEA | CNBC

New filings for unemployment benefits rose more than expected last week, according to this morning’s update from the Labor Department. Jobless claims jumped 12,000 to a seasonally adjusted 290,000 for the week through Nov. 8—the highest since late-September. The latest numbers look a bit worrisome, but reviewing today’s figures in historical context suggests that a positive tailwind is still blowing for the US labor market.
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US retail sales are expected to rise 0.3% in tomorrow’s October report vs. the previous month, according to The Capital Spectator’s median econometric forecast. The prediction reflects a substantial rebound in growth vs. the previous month’s 0.3% decrease.
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● ECB warned euro zone inflation, growth to be lower than expected | Reuters
● China industrial output growth, retail sales slow | Marketwatch
● Russia Sends More Convoys Into Ukraine as Cease-Fire Collapses | Time
● Fed’s Dudley: expectations for mid-2015 rate lift-off reasonable | Reuters
● US EIA Lowers Expectations For 2015 Oil and Gasoline Prices | MNI

The Jerome Levy Forecasting Center has generated media attention recently with a new forecast of a 65% probability of a global recession next year, a contraction that will lead to a US downturn by the end of 2015. “Clearly the direction of most of the recent global economic news suggests movement toward a 2015 downturn,” the center’s chairman advised on Oct. 23 via Bloomberg. The reasoning is that balance-sheet excesses in the developed world threaten to drum up another financial crisis—a crisis that central banks will be hard-pressed to address because monetary stimulus is already in high gear and so there’s minimal capacity for juicing the economy with new liquidity.
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● NFIB: US Small Businesses Expanding But Skeptical | CFO Magazine
● Eurozone Sep industrial production bounce disappoints | FT
● UK Unemployment Remains at 6% as Wage Growth Accelerates | Bloomberg
● Germany Council of Econ Experts Slashes Forecasts | MNI
● Fed now committed to data-dependent interest rate hikes: Plosser | Reuters
● Xi’s Rapid Rise in China Presents Challenges to the US | NY Times