According to the WSJ yesterday, the IMF is raising its forecast for US growth next year to 3.5% from its last estimate of 3.1%, partly because of expected lower energy costs. The nearby futures prices for gasoline and heating oil are down 45% and 33% from their summer highs. Last year, consumers spent $371 billion on gasoline and $27 billion on heating oil. So they could save a total of about $175 billion, or $1,510 per household at an annual rate.
Payroll employment gains have averaged 227,830 per month during the 12 months through November, up from 205,100 per month last November, and the most since March 2006. Inflation-adjusted wages and salaries in personal income rose 2.9% y/y to a record high during October. As I showed yesterday, our Earned Income Proxy suggests that they continued to rise sharply during November.
Today's Morning Briefing: 2015 Is Coming. (1) Reassessing 2015. (2) Lower oil prices widely deemed to be a net positive for growth. (3) $1.5 trillion windfall. (4) Winners and losers by countries. (5) IMF raising US growth for 2015. (6) Better growth with lower inflation. (7) Bond yields and crude oil should stabilize, but the dollar could soar some more. (8) Fed’s “lift off” may be delayed or downsized. (9) Still targeting 2300 for S&P 500 in 2015. (10) Net earnings revisions down for Energy, up for Transportation. (11) Focus on overweight-rated S&P 500 Transportation.
