Weekly economic update for January 24, 2022


Highlights of key economic statistics from last week compiled by Putnam Investments.


economy
  • Housing starts grew 1.4% in December compared with November, according to the Census Bureau and the Department of Housing and Urban Development.
  • Existing home sales fell 4.6% in December, the National Association of Realtors reported.
  • The Conference Board Leading Economic Index increased in December.


Employment
  • Initial jobless claims increased by 55,000 to 286,000 in the week ended January 15, 2022, the Department of Labor reported.


Profits
  • As of January 13, 2022, of the 24 S&P 500 Index companies reporting fourth-quarter earnings, 19 beat analysts’ estimates, according to S&P Dow Jones Indices.


Emotion
  • The ZEW Indicator of Economic Sentiment for Germany rose significantly in January.


Europe
  • Eurostat reported the euro area annual inflation rate increased to 5.0% in December from 4.9% in November.
  • Euro area construction output declined by 0.2% in November compared with October, according to Eurostat.
  • Germany’s Federal Statistical Office found producer prices rose 5.0% in December compared with November.


Rates
  • The yield on the 10-year Treasury note fell.


Risks
  • Upward pressure on inflation from multiple fronts (supply chain disruptions, housing costs, and the labor market) could pressure central banks to pull forward their timelines for monetary policy normalization.
  • Declining liquidity and deteriorating financial conditions, combined with high valuations, should lead to a substantial uptick in risk asset volatility.
  • Global leverage, created by pandemic response packages, is at worrisome levels and will eventually need to be paid for.


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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.