WEEKLY ECONOMIC UPDATE - December 6, 2010

JOBLESS RATE INCREASES BY 0.2%
Unemployment hit 9.8% last month. The latest Bureau of Labor Statistics report said the economy only created 39,000 new jobs in November; economists expected three times that. After all, ADP reported 93,000 new positions in the private sector last Wednesday, and the revised government estimate for October showed the economy adding 172,000 jobs in that month. Labor Department figures indicate that the unemployed and underemployed now make up around 17% of the population.^1,2

SECOND POLL GAUGES CONFIDENCE AT 5-MONTH HIGH
The Conference Board’s consumer confidence index rose to 54.1 for November, reaching a peak unseen since June (which is exactly what happened last week with the University of Michigan’s consumer poll). Sub-indices measuring employment expectations and income expectations also improved.³

SOME GOOD NEWS FROM THE REAL ESTATE SECTOR
Pending home sales increased by 10.4% in October, according to the National Association of Realtors. This would seem to suggest better numbers for existing home sales in November. NAR’s pending home sales index is now back at the level it was before the appearance of the federal home buyer tax credit.⁴

ISM INDEXES BOTH AT 55 OR BETTER
The closely-watched manufacturing and non-manufacturing sector surveys from the Institute for Supply Management show moderate growth. The manufacturing index declined to 56.6 from October’s 56.9 mark; the service sector index improved from 54.3 in October to 55.0 in November. The manufacturing index showed a 7.7% slump in production for November; the service sector index showed 4.0% gains in export orders and inventories.⁵

DECEMBER GETS OFF TO A BULLISH START
In the first three days of December, the S&P 500 gained 3.74% as Black Friday sales numbers and reassurance from the European Central Bank aided Wall Street. Gold closed at a record $1406.20 an ounce Friday. For the week, the big three U.S.indices performed as follows: DJIA, +2.62% to 11,382.09; S&P 500, +2.97% to 1,224.71; NASDAQ, +2.24% to 2,591.46 (its highest close in 35 months).^6,7

COMING NEXT WEEK: It is a light week in terms of major economic releases. Wednesday, we get initial and continuing jobless claims data and learn about October wholesale inventories. Thursday, we have the Universityof Michigan’s first consumer sentiment survey for December.

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+9.12	+9.80	+0.93	+0.78
NASDAQ	+14.20	+19.25	+2.80	-0.93
S&P 500	+9.81	+11.35	-0.64	-0.76
REAL YIELD	12/3 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.86%	1.24%	2.16%	4.03%

Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 12/3/10^6,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

WEEKLY QUOTE

“Nothing will ever be attempted, if all possible objections must be first overcome.”
– Samuel Johnson

WEEKLY TIP

Have you taken a Required Minimum Distribution from your IRA yet? If you are age 70½ or older, it’s time. If you are taking your very first RMD, you can put it off until April 1 of next year - but if you do that, you’ll have to take two RMDs in 2011. The RMD deadline for most IRA owners aged 70½ or older is December 31.

WEEKLY RIDDLE

What do these words have in common: pig, pony, bob, dove and cotton?

Last week’s riddle:
What has exactly three feet, but not a single toe?

Last week’s answer:

A yardstick.

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Citations. 1 - forbes.com/2010/12/03/markets-briefing-open-jobs-equities-unemployment.html [12/3/10] 2 - ocregister.com/articles/rate-278642-november-time.html [12/3/10] 3 - bloomberg.com/news/2010-11-30/stocks-in-u-s-pare-retreat-after-consumer-confidence-report-tops-estimate.html [11/30/10] 4 - online.wsj.com/article/SB10001424052748703377504575650470810345484.html [12/3/10] 5 - ism.ws/ISMReport/nonmfgROB.cfm [12/3/10] 6 - cnbc.com/id/40496761 [12/3/10] 7 - money.cnn.com/2010/12/03/markets/markets_newyork/index.htm [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=12%2F3%2F09&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=12%2F3%2F09&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=12%2F3%2F09&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=12%2F2%2F05&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=12%2F2%2F05&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=12%2F2%2F05&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=12%2F4%2F00&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=12%2F4%2F00&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=12%2F4%2F00&x=0&y=0 [12/3/10] 9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [12/3/10] 9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [12/3/10] 10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]

C.W. Copeland
"Your Personal CFO"
C.W. Copeland & Associates
Lifestyle Management Advisors
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Atlanta, GA 30313

404.567.3275 (direct)
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