U.S. Review
Markets Whipsawed, but the U.S. Economy Is Stable
- Fears that economic activity in China is much weaker than reported rattled global financial markets during the week. The VIX, which gauges equity market volatility, jumped to its highest level since late-2011. At the same time, economic data released during the week continued to show that the U.S. economy is on solid footing.
- Second-quarter real GDP growth in the U.S. was upwardly revised from a 2.3 percent pace in the advance estimate to a more-than-expected 3.7 percent annual rate. Consumer and government spending as well as business and residential investment were revised higher in the second estimate.
Global Review
Mixed Foreign Economic Data This Week- Indices of business confidence in the euro area generally moved higher in August, suggesting that economic growth in the Eurozone remains positive thus far in Q3.
- Japanese retail spending rebounded in July from its slump in June. However, the overall CPI inflation rate receded further, indicating that authorities need to do more to boost inflation toward the government’s 2 percent objective.
- The downturn in Brazil deepened, with real GDP falling 2.6 percent on a year-ago basis in Q2.
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