Weekly economic update

Economic Update for January 14, 2019   |   Download PDF

Highlights of news-making events of the past week, from the economy and profits to Europe and interest rates.

economy

  • The Federal Reserve reported that consumer credit increased at an annual rate of 6.75% in November.
  • The CPI fell 0.1% and core CPI rose 0.2% in December, the Bureau of Labor Statistics reported.

employment

  • Initial jobless claims declined by 17,000 to 216,000 in the week ended January 5, 2019, according to the Labor Department.

profits

  • According to FactSet, the estimated earnings growth rate for the S&P 500 Index for the fourth quarter is 11.4%.

emotion

  • The NFIB Small Business Optimism Index declined slightly in December.

europe

  • Euro area unemployment declined to 7.9% in November from 8.0% in October, according to Eurostat.
  • Eurostat reported that retail trade increased 0.6% in the euro area in November.
  • The European Commission stated that the Economic Sentiment Indicator and the Business Climate Indicator for the euro area both decreased in December.
  • Germany’s Federal Statistical Office noted that factory orders slipped 1.0% in November.

rates

  • The yield on the 10-year U.S. Treasury note traded in a narrow range.
  • According to Federal Open Market Committee recent meeting minutes, many policy makers believe the central bank can be “patient” about raising interest rates.

risks

  • The Fed risks a policy error if they do not re-evaluate the interest-rate path and terminal size of the balance sheet.
  • Brexit, Italian debt dynamics, and the re-emergence of populism risk tipping Europe back into recession.
  • Weak stimulus in China thus far is showing little sign of slowing the pace of deceleration.

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All economic and performance information is historical and does not guarantee future results. The views and opinions expressed are those of Putnam Investments, are subject to change with market conditions, and are not meant as investment advice.