{"id":12777,"date":"2023-10-25T15:06:41","date_gmt":"2023-10-25T15:06:41","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=12777"},"modified":"2024-01-10T17:16:39","modified_gmt":"2024-01-10T17:16:39","slug":"u-s-retail-spending-jumps-china-sputters-home-sales-weak","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/u-s-retail-spending-jumps-china-sputters-home-sales-weak\/","title":{"rendered":"U.S. Retail Spending Jumps, China Sputters, Home Sales Weak"},"content":{"rendered":"\n<p>In this week\u2019s Steady Investor, we take a deeper dive into key factors that we believe investors should keep an eye on, such as:<\/p>\n\n\n\n<p>\u2022 U.S. retail status<br>\u2022 China\u2019s economic growth<br>\u2022 Weak year for U.S. home sales<\/p>\n\n\n\n<p><strong>U.S. Retail Sales Blow Past Expectations<\/strong> \u2013 A major theme of the U.S. economic growth story in 2023 has been consumers who just keep on spending. September was no different. According to the Commerce Department, U.S. consumers kept splurging last month, with spending at stores, online, and restaurants (retail sales) jumping 0.7% from August to September. This figure was more than double economists\u2019 estimates, signaling that the U.S. economy continues to expand at a stronger pace than most expect. Nearly all retail categories posted gains last month, and when you exclude gas stations, car dealers, building-materials stores, and food services \u2013 which is known as the \u2018control group\u2019 economists use to track the underlying pace of spending \u2013 retail sales still rose 0.6%. The takeaway here is one we\u2019ve made in previous weeks, which is that the U.S. economy likely expanded at a far faster pace than just about everyone estimated in Q3. We\u2019ve also made the argument that long-duration interest rates rose in August and September in response to this stronger-than-expected growth, which appears to have been verified by these strong consumer spending figures. As seen in the monthly retail trade and food services spending chart below from the U.S. Census Bureau, the spending recovery in the wake of the pandemic has yet to lose any steam<sup>1<\/sup>.<\/p>\n\n\n\n<p><span style=\"text-decoration: underline;\"><strong><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\">Tips for Handling Stock Market Volatility<\/a><\/strong><\/span><\/p>\n\n\n\n<p>Every investor understands the worries that come with a volatile market. It\u2019s impossible to avoid market volatility, but there are ways you can minimize the worst impacts of it.<\/p>\n\n\n\n<p>In our guide, \u2018<em><span style=\"text-decoration: underline;\"><strong><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\">The Do\u2019s and Don\u2019ts of Stock Market Volatility<\/a><\/strong><\/span><\/em>\u2019 we provide recommendations for investors, based on 30 years of expertise. We also explore:<\/p>\n\n\n\n<p>\u2022 Three best practices to successfully manage periods of market volatility<br>\u2022 Three common mistakes investors make, and why they are so damaging to your long-term investing goals<br>\u2022 Historical data that supports our conclusions and underscores the recommendations we propose<\/p>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide today!<\/p>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\"><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\">Download Your Copy Today: <em>The Do\u2019s and Don\u2019ts of Stock Market Volatility<\/em><sup>3<\/sup><\/a><\/span><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"700\" height=\"600\" src=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2023\/10\/pic-1-1.png\" alt=\"\" class=\"wp-image-12778\" srcset=\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2023\/10\/pic-1-1.png 700w, https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2023\/10\/pic-1-1-300x257.png 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><figcaption class=\"wp-element-caption\"><strong><em>Census<sup>3<\/sup><\/em><\/strong><\/figcaption><\/figure>\n\n\n\n<p>There is one specific area of spending, however, where Americans are starting to cut back: live entertainment. According to a survey from<em> The Wall Street Journal<\/em> and Credit Karma, nearly 60% of Americans said they have cut back on live entertainment like sporting events and concerts because of rising costs.<\/p>\n\n\n\n<p><strong>China\u2019s Sputtering Economic Growth and Potential Crisis<\/strong> \u2013 China\u2019s National Bureau of Statistics reported that the world\u2019s second-largest economy grew 4.9% in the third quarter. While 4.9% GDP growth registers as consistent with China\u2019s goal of 5% GDP growth for the year, mounting headwinds have many economists questioning China\u2019s fundamental strengths. Let\u2019s start with the positives. In the latest Q3 data, business surveys pointed to improving factory output, retail sales rose 5.5% in September year-over-year (compared to August\u2019s 4.6% rate), and industrial production has been posting a strong recovery in the wake of weak export activity. Domestic travel has also picked up, as has lending to households and businesses. On the negative side, however, exports declined for the fifth straight month, and China\u2019s real estate market is in distress. Home sales by value fell 3.2% in the first three quarters compared to a year ago, and major developers Evergrande and Country Garden have essentially collapsed. China\u2019s government has been responding by cutting interest rates and scrapping restrictions on home purchases, but consumers are wary given real estate\u2019s year-to-date performance.<sup>4<\/sup><\/p>\n\n\n\n<p><strong>A Weak Year for U.S. Home Sales<\/strong> \u2013 If China\u2019s real estate market can be described as battered in 2023, the U.S. might be aptly characterized as moderating. In September, existing home sales \u2013 which account for a majority of home sales each year \u2013 fell by 2% from August and 15.4% year-over-year. Meanwhile, the median existing home price increased by 2.8% year-over-year in September, to $394,400. Higher prices, combined with the highest mortgage rates in over 20 years and low inventories, are all working together to pressure sales in the market. By some estimates, total existing home sales in the U.S. could land at around 4 million in 2023, which would be the least number of existing homes sold since 2008. As Americans are reluctant to leave their homes given high mortgage rates, it has resulted in an increasing number of housing permits to build new single-family homes \u2013 which have risen for eight straight months.<sup>5<\/sup><\/p>\n\n\n\n<p><strong>Overcoming Market Volatility<\/strong> \u2013 If you\u2019re a long-term investor trying to avoid volatility, it\u2019s impossible. But this doesn\u2019t mean that volatility isn\u2019t manageable! Our guide, \u2018<strong><span style=\"text-decoration: underline;\"><em><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\">The Do\u2019s and Don\u2019ts of Stock Market Volatility<\/a><\/em><\/span><\/strong>\u2019 explores:<\/p>\n\n\n\n<p>\u2022 Three best practices to successfully manage periods of market volatility<br>\u2022 Three common mistakes investors make, and why they are so damaging to your long-term investing goals<br>\u2022 Historical data that supports our conclusions and underscores the recommendations we propose<\/p>\n\n\n\n<p>If you have $500,000 or more to invest, get our free guide today!<\/p>\n\n\n\n<p><strong><span style=\"text-decoration: underline;\"><a href=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/dos-and-donts-of-volatility?source=zim&amp;medium=blog&amp;term=bimonthly_dos_and_donts_zim_10_23_2023&amp;content=dos_and_donts\">Download Your Copy Today: <em>The Do\u2019s and Don\u2019ts of Stock Market Volatility<\/em><sup>6<\/sup><\/a><\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>September retail spending blows past expectations, a potential crisis for China&#8217;s economy, existing home sales moderate but new building permits rise.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-12777","post","type-post","status-publish","format-standard","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12777","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=12777"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12777\/revisions"}],"predecessor-version":[{"id":12780,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12777\/revisions\/12780"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=12777"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=12777"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=12777"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}