US Consumer spending fell, durable orders down

Consumer spending fell 1% in October, the largest decline since September 2001, the Commerce Department reported Wednesday. The result matched analysts' expectations. Real consumer spending fell 0.5%. Personal income rose 0.3% in October after a 0.1% gain in September. Analysts were looking for a 0.1% income gain for October. Real disposable income rose 1% in October. As expected by analysts, the core personal consumption expenditure price index was unchanged in October. This index gained 0.2% in September, and is up 2.1% in the past year.



Orders for U.S.-made durable goods fell 6.2% in October, the largest decline in two years, the Commerce Department estimated Wednesday, as orders for transportation goods fell 11.1%. Economists surveyed by MarketWatch had expected an overall decline of 2.5%. Excluding transportation, orders fell 4.4%. Orders for core capital equipment - the kind of investments businesses make to expand or update their productive capacity - fell 4% in October, after a 3.3% decline in September. October shipments fell 2.4% after a 0.2% dip in September. Excluding transportation, shipments fell 1.7% in October after a 0.9% decline in September. New orders for September were revised to a decline of 0.2%, compared with the prior estimate of a 0.9% gain

U.S. Q3 GDP revised down to - 0.5%

The U.S. economy contracted at a 0.5% annual rate in the third quarter, slower than the negative 0.3% estimated a month ago, the Commerce Department reported Tuesday.

The revisions to real gross domestic product were largely due to weaker consumer spending. Economists were predicting a revision to about negative 0.6%.

The core personal consumption expenditure price index rose 2.6%, compared with the initial estimate of a 2.9% gain.

Fundamentlas for Crude Oil

Bullish factors for crude oil prices yesterday included

(1) the drop in the dollar index to a 1-1/2 week low,

(2) the sharp rally in US and European stock markets,

(3) the announcement by the Chinese of their second stimulus package in the last two weeks, potentially increasing energy demand, and

(4) comments from oil ministers from Iran and Venezuela that OPEC must cut production again after last month's cut failed to buoy prices.

Bearish factors for crude oil prices yesterday included continuing weak global economic data with

(1) the weaker-than-expected US existing home sales for Oct, and

(2) the larger-than-expected fall in the Nov German IFO business sentiment to a 15-3/4 year low .