The Macro View – December 2016

United States

  • Third quarter U.S. economic growth was revised higher to 3.2% from 2.9%, according to the second estimate.
  • Consumption grew at a better than expected 2.8%, contributing positively to the upward revision.
  • The U.S. labor market continues to tighten, job creation has been solid and the number of people filing for jobless claims are at historic lows.
  • We continue to see gradual improvement in the housing sector, while the manufacturing sector has shown further signs of stabilizing.


  • Third quarter U.K. economic growth was confirmed at 0.5%, according to the second estimate.
  • For now, U.K. economic data is holding up well, however, it is still too early evaluate the medium and long-run impact of the Brexit vote.
  • Third quarter Eurozone growth was confirmed at 0.3%, supported by household consumption.
  • ECB president Mario Draghi continues to characterize risks to growth as tilted to the downside.
  • Economic data coming out of China has been largely consistent with economic growth rates that will satisfy official targets, the question is whether they will be able to sustain these levels in 2017.

Global Monetary Policy

  • Global monetary policy remains exceedingly accommodative by any historical measure.
  • The Fed voted to tighten monetary policy, raising interest rates by a quarter point. The increase was just the second such hike during the last decade.
  • The Bank of England voted to leave policy unchanged, stressing that they can move in either direction in response to income economic data.
  • The ECB also held a December meeting and voted to extend their bond purchase program to December 2017 while decreasing the size of their monthly purchases from 80 billion euros to 60 billion.

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