According to preliminary estimates, the U.S. economy expanded by a solid 2.9% in the third quarter of 2016.
Consumption grew at a moderate 2.1%, while an inventory build and a surge in exports helped support headline growth.
The U.S. labor market remains in good condition as job creation has been solid and the number of people filing for jobless claims is quite low.
We continue to see gradual improvement in the housing sector, while the manufacturing sector seems to be stabilizing after a rough start to the year.
International
According to preliminary estimates, the U.K. economy grew by 0.5% in the third quarter, surpassing market expectations.
For now, the U.K. economy is holding up well. However, it is still too early to evaluate the medium to long-run impact. Thus, recent data has to be interpreted with a grain of salt.
The Eurozone economy continued to bump along during the month of October, with risks to growth still prevalent.
The Eurozone unemployment rate was steady at an elevated 10.0%, while inflation continues to be running well below the official target.
Economic data out of China has been relatively robust. However, China’s currency continues to weaken versus the U.S. dollar as development continues to warrant attention.
Global Monetary Policy
Monetary policy remains exceedingly accommodative by any historical measure.
The Fed voted to leave policy unchanged, but the table is set for a hike in December barring any unforeseen exogenous shock.
The Bank of England also voted to leave policy unchanged, highlighting the limited appetite for above target inflation that will likely be sparked by the recent decline in pounds.
In general, developed market central banks seem to be shifting toward policies that help create steeper yield curves.
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