Durable goods orders for the month of November rose 3.8%, well above the expected increase of 2.2%. However, most of the increase came from aircraft orders, so ex-transportation, orders for rose just 0.3%.
Personal income and spending both disappointed for the month of November. Both measures rose just 0.1%, which means when adjusted for inflation, income is declining. This highlights the inadequacy of the unemployment rate as an indicator of actual spending and is one of the reasons economic growth will be muted in 2012.
On a positive note, new home sales increased 1.6% in November to a seven month high. Bond prices had trailed off slightly prior to the housing data, but the unexpected jump pushed prices sharply lower. The yield on the 10 year note has risen above 2.00% to yield 2.03%, while mortgage prices are worse by .375%.
The bond market has an early close today and the HSOA lock desk will be closing at 12 noon, Pacific Time.
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