Economy by the week - 18th Nov

Here are the key economic developments for the week:

Economy

- In the US, CPI rose 0.4% and core CPI increased 0.2% in October, according to Bureau of Labor Statistics (BLS).

- The Producer Price Index (PPI) rose 0.4% in October, according to BLS.

- The Census Bureau reported that retail sales increased by an estimated 0.3% in October.

Employment

- Initial jobless claims rose by 14,000 to 225,000 in the week ended November 9, 2019, according to the Labor Department.

Corporate Profits

- As of Nov. 11, 2019, 457 S&P 500 Index companies reporting third-quarter earnings, 341 beat analysts’ estimates, according to S&P Dow Jones Indices.

Sentiment

- The ZEW Indicator of Economic Sentiment increased markedly in November. (ZEW Financial Market Survey is an aggregation of the sentiments of approx. 350 economists and analysts on the economic future of the Germany in the medium term)

Europe

- Euro area annual inflation fell to 0.7% in October, from 0.8% in September, according to Eurostat.

- Euro area industrial production was up by 0.1% in September. (Eurostat) - In Germany, wholesale prices fell 2.3% in October, according to Federal Statistical Office.

- UK GDP grew 0.3% in the third quarter, according to the Office for National Statistics.

Rates

- The yield on the 10-year U.S. Treasury note declined.

- Fed Chairman Jerome Powell said the economic outlook “remains favorable.”

Risks

- The effect of tariffs coupled with low corporate confidence is likely to increase pressure on global manufacturing.

- Brexit, Italian debt situation, and a weak European banking system risk could tip EU back into recession.

- In China, the pace of deceleration continues to be above and beyond the stimulus being injected into the economy.

Acinox Insights