GlobalA growing belief that central banks have not only concluded their tightening cycles but could even initiate an easing cycle within the next six months has continued to fuel a rally in financial markets over the past few days. In our charts this week, however, we steer away from the daily macro news cycle and highlight six charts instead that give some colour on some of the key macroeconomic trends that have unfolded during 2023. This is ahead of next week’s publication, which will include some perspectives, via another batch of charts, on the outlook for 2024. Our charts this week specifically concern the outperformance of the US economy (chart 1), and the disinflationary trends that have engulfed advanced economies (chart 2). The latter has been driven in large part by falling energy prices (chart 3) and has emerged notwithstanding still-tight labour markets (chart 4). China’s economy has also been key this year amidst intense concerns about its beleaguered property market and rising debt burden (chart 5). Finally, with several structural factors in contention that have impacted the supply side of the world economy this year (e.g. heightened geopolitical stress, the advance of AI) we focus in our last chart on one of the most critical, namely climate change and temperature anomalies in particular (chart 6).
- Personal spending remains firm y/y.
- Increase in wages & salaries moderates.
- Prices of consumer durables fall as services gain slows.
by:Tom Moeller
|in:Economy in Brief
USA| Nov 30 2023U.S. Pending Home Sales Fall in October
- Decline is second in last three months.
- Most regions record weakening.
by:Tom Moeller
|in:Economy in Brief
- November reading well above 50, highest in a year-and-a-half.
- Production and new orders up most, show business activity strengthened.
- Inflation still strong, but did ease in latest survey.
USA| Nov 30 2023U.S. Jobless Claims Inched Up in November 25 Week
- Initial claims in the latest week are up 7,000.
- Continuing claims reached the highest level since November 2021.
- Insured unemployment rate up slightly to 1.3%.
Europe| Nov 30 2023Euro Area Growth and Inflation Weaken
GDP trends cooled across the European Monetary Union in the third quarter as updated GDP reports begin to emerge. Quarter-to-quarter growth in the monetary union fell by 0.2% in Q3 after rising 0.6% in Q2. Finland, France, Germany, Ireland, Portugal, and the Netherlands all logged declines in GDP in the third quarter. Of the ten (EMU member and nonmember) countries presented in the upper portion of the table (below), GDP growth decelerates in six of them; in addition, there is deceleration for the monetary union as a whole. The United Kingdom also shows decelerated growth in the third quarter. Pooled together, the four largest EMU economies register deceleration, the rest of the monetary union on its own decelerates, the median for the monetary union decelerates, logging a 0.5% decline in GDP in Q3 after a 1% gain in Q2- decelerations are rampant. The major exception to these trends of course is ‘across the pond’ generated in the United States where 5.2% GDP growth in Q3 trumps a 2.1% gain in Q2. Acceleration lives...but the Fed is quickly seeing deceleration in its wake, a reason to moderate its policy path. We are living in an age of kinder-gentler central banks…for better-or-worse.
GDP growth rankings are weak- The far-right hand column of the table chronicles the ranking of GDP growth on data since 1997. Among European Monetary Union members, only Portugal has a ranking that exceeds its historic median on this timeline (above its 50-percentile). The median result for the nine reporting EMU members in the table is a standing at the 24.5 percentile, right at the border for the bottom quartile of the historic queue of growth rates. Of course, this stands in marked contrast to United States where its 5.2% growth rate has a 72.7 percentile standing, a standing nearly in the top quarter of all growth rates over the same period.
Growth rates in the table are color-coded to emphasize slowdowns and speedups. The four quarterly year-over-year calculations for each country or area show a preponderance of red numbers indicating slowdown. GDP growth has been slowing down persistently just about everywhere apart from - you guessed it-the United States.
- Growth is broadened, notably in capital spending, housing & government.
- Profit gain accompanies dividend decline.
- Strength in consumer spending is reduced.
- Increase in price index remains double Q2’s gain.
by:Tom Moeller
|in:Economy in Brief
USA| Nov 29 2023U.S. Advance Trade Deficit Widens Moderately in October
- Exports decline while imports were flat.
- Sizable reductions in exports of consumer goods, autos and “other” goods.
- Imports of capital goods up noticeably while autos and consumer goods decreased.
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