From that report:
Unemployment. The October 2012 Employment Report from the U.S. Labor Department showed yet another gain of 147,000 private sector jobs (government employment was down 1,000). The unemployment rate now stands at 7.7%, a decrease of 0.2% from the previous month primarily due to a decrease in the number of individuals looking for work. The private sector continues to lead the job creation. The Wells Fargo Economics Group maintains its forecast of unemployment to remain at about 7.8% throughout 2013.
Real Gross Domestic Product (GDP). The U.S. economy improved at a much better rate than initially reported as the U.S. Department of Commerce revised its Q3-2012 GDP number up from 2.0% growth to 2.7%. Full year GDP growth for 2012 will likely come in at around 2.2% as companies continue investing in equipment and technologies but hold back on hiring. If the U.S. can avoid casting itself over the “fiscal cliff” and if Europe can outlast its prolonged credit crisis, the Wells Fargo Economics Group forecasts a rather lackluster full year GDP growth of 1.4% in 2013.
U.S. Non-Residential Construction. Private non-residential construction spending for October 2012 is up 10.7% compared to October 2011 due to increased spending in the power, manufacturing and commercial sectors. In contrast, public non- residential construction is down 1.0% from a year ago even as it eked out a gain of 0.8% compared to September 2012. State transportation budgets face continued strain and investment in highway and street construction was down 5.0% from a year ago.
Fuel prices. The price of gasoline declined steadily through October and November to a monthly national average of $3.44 per gallon, the lowest average since July. Even as drivers received a respite after a summer of near $4 per gallon fuel, these prices are still at record highs for this time of year. The average annual price of gas for 2012 ($3.63 per gallon) will be the most expensive on record and is 12 cents more than the current record high set last year. (Data source: AAA)
Housing. The residential housing market is one of the shining stars of the U.S. economy at present which may be a surprise given that in 2011, housing starts totaled about 610,000 units. Home values are slowly on the rise as are housing starts, which will total about 780,000 units in 2012. Mortgage rates are likely to remain near record lows and should con- tribute to housing starts that approach the 1 million unit mark in 2013.
Consumer Price Index. Retail pricing pressures eased somewhat during 2012 to about 2.2% compared to 3.1% in 2011. The Wells Fargo Economics Group forecast for overall inflation, which includes fuel and food, is expected to nudge up to 2.5% in 2013.
Producer Price Index. Wholesale prices moderated somewhat in 2012 only slightly to 2.3% following price increases of about 6.0% in 2011. For 2013, the Wells Fargo Economics Group is expecting wholesale pricing pressures to settle in at around 3.2%.
Interest rates. In an effort to promote growth, the U.S. Federal Reserve has signaled an intention to keep interest rates low for at least another year. The European debt crisis has extended a flight to safety that may keep yields on 10-year U.S. notes below 2.0% through 2013.
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