Today's Economic Data Highlights

A raft of data before the Christmas weekend, including claims, personal income and spending (and the core PCE index), durable goods orders, confidence, and new home sales…There is no POMO today.
 
8:30: Unemployment insurance claims….settling at a new level?  The median forecast for initial claims shows no change from last week, and at a level not too far below the four-week average (about 425k if the median forecast is right).  Continuing claims continue to drift lower; the data to be released today cover the reference week for the December employment report.  Claims for emergency/extended benefit programs should drop significantly as today’s data cover the week in which these programs lapsed.
For initial claims, median forecast (of 44): 420k, ranging from 400k to 430k; last 420k.
For continuing claims, median forecast (of 11): 4.1 million, ranging from 4.03mm to 4.15mm; last 4.135mm.
 
8:30: Personal income and outlays for Nov....sturdy gain in spending?  The key question in this report is how the downward revision to Q3, set against an expected sturdy increase for November, will affect the pace at which real spending is tracking into Q4.  With its skinny gain in payrolls and flat readings on the workweek and wages, this report is unlikely to show much progress in wage and salary income.  Absent a major upside surprise, the core price index for personal consumption expenditures should register year-to-year low for the series (since 1960).
On income, median forecast (of 71): +0.2%, ranging from flat to +0.4%; last +0.5%.
On spending, median forecast (of 75): 0.5%, ranging from +0.1% to +0.8%; last +0.4%.
On PCE core price index: median forecast (of 49): +0.1%, ranging from flat to +0.2%; last +0.01%.
 
8:30: Durable goods orders for Nov…air pocket?  As is so often the case, our expectation of a drop in durable goods orders rests mainly on a slump in bookings for civilian aircraft; other forecasts of a drop probably do as well, as the median forecast for nontransportation orders is +1.8%.  Last month, this “core” component of the report fell 2.7%.  With other indicators generally pointing to stronger economic momentum, it would be surprising if these orders did not mean revert to some degree.
median forecast (of 74): -0.5%, ranging from -3.6% to +3.0%; last -3.3%.
 
10:00 (9:55 to subscribers): Reuters/University of Michigan consumer sentiment for Dec (final)…edging higher?  The median forecast for this index is slightly higher than the preliminary figure reported nearly two weeks ago.  The median expectation for inflation five to ten years ahead edged back down to 2.7%, the low end of an extremely tight range in which this indicator has fluctuated over the past year.
Median forecast (of 67): 74.5, ranging from 71 to 76.7; last 74.2 (Nov final).
 
10:00: New home sales for Nov...a bounce off the low?  Sales of new homes fell to 283k in October, just 1k above the all-time low reached in May.  We expect a small increase, but not one that would move sales outside the 282k-310k range that has prevailed since the then.
median forecast (of 69): +6.0%, ranging from +0.7% to +13.1%; last -8.1%.
 
16:30: Federal Reserve balance sheet….The balance sheet now shows a clear break-out from the $2.3 trillion that had prevailed during most of 2010.  Today's data will continue that trend. Fed UST holdings are now over $1 trillion.

Per GS' Ed McKelvey