The December 2023 Philly Fed Manufacturing Business Outlook Survey continued to decline overall. The survey’s indicators for general activity and shipments remained negative. Furthermore, the index for new orders declined sharply and turned negative. The diffusion index for current general activity declined from -5.9 in November to -10.5 in December. This is the index’s 17th negative reading in the past 19 months. Manufacturing remains in a recession.

The third estimate of 3Q2023 real gross domestic product (GDP) increased at an annual rate of 4.9% (2.9% year-over-year). This is the same as the advance estimate and is down from the second estimate of 5.2%. In the second quarter, real GDP increased 2.1 percent. The third estimate primarily reflected a downward revision to consumer spending. Imports, a subtraction in the calculation of GDP, were revised down.

The Kansas City Fed’smanufacturing activity was flat in December 2023. The month-over-month composite index was -1 in December, up slightly from -2 in November and -8 in October. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes.

Total existing-home sales fell 7.3% year-over-year in November 2023. The median existing-home price for all housing types in November was $387,600, an increase of 4.0% from November 2022. The inventory of unsold existing homes slid 1.7% from the previous month, or the equivalent of 3.5 months’ supply at the current monthly sales pace. NAR Chief Economist Lawrence Yun added:

The latest weakness in existing home sales still reflects the buyer bidding process in most of October when mortgage rates were at a two-decade high before the actual closings in November. A marked turn can be expected as mortgage rates have plunged in recent weeks.

The Conference Board Consumer Confidence Index® increased in December to 110.7 (1985=100), up from a downwardly revised 101.0 in November. Dana Peterson, Chief Economist at The Conference Board stated:

December’s increase in consumer confidence reflected more positive ratings of current business conditions and job availability, as well as less pessimistic views of business, labor market, and personal income prospects over the next six months. While December’s renewed optimism was seen across all ages and household income levels, the gains were largest among householders aged 35-54 and households with income levels of $125,000 and above. December’s write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns. Consumers’ Perceived Likelihood of a US Recession over the Next 12 Months abated in December to the lowest level seen this year—though two-thirds still perceive a downturn is possible in 2024.