U.S. Review

Slow Growth for the Foreseeable Future

  • This week's third quarter GDP release pointed toward an ongoing moderate pace of economic growth. Growth for the quarter was supported by consumer spending, much slower business spending, residential construction activity, and government spending. Net exports and inventories detracted from growth. 
  • Durable goods orders bounced back in September; however, the details of the report were less encouraging with weakness in several key areas. The pullback in orders suggests that growth will likely be weaker through the end of the year.

Global Review

Central Bank Stimulus and the Global Economy

  • Faced with chronic deflation and slow growth, Japan this week announced a ¥750 billion fiscal stimulus to be deployed in tandem with the Bank of Japan's stepped-up asset purchase program. 
  • The Bank of England's asset purchase program seems to be bearing fruit. The U.K. economy sprung out of recession in Q3, but we explain in this week's Global Review why Britons might want to wait before popping the champagne corks and heading for High Street. 
  • Eurozone business sentiment signals continued weakness, as PMIs there are still in contraction.