Signs Pointing to Solid Third Quarter Growth
|U.S. Review
Signs Pointing to Solid Third Quarter Growth
- Retail sales rose 0.1% in September. Less-volatile control group sales, which feed into GDP, increased 0.5%.
- Industrial production improved 0.3% in September as mining and durable goods orders advanced. Production of business equipment grew a strong 8.0% in Q3.
- Housing continues to underwhelm. Existing home sales fell 3.4% to a 5.15 million-unit pace. Total starts declined 5.3% in September due to a drop in the multifamily segment. The federal government ran a $779 billion deficit during FY 2018. Tax collections grew 0.4%, while spending rose 3.2%.
Global Review
Chinese Economic Growth Continues to Edge Lower
- Chinese GDP growth softened to 6.5% year over year in Q3, the slowest pace since 2009. That slowdown comes despite monetary policy easing from China’s central bank this year, and highlights the potential for more central bank support going forward.
- U.K. and E.U. officials failed to reach a Brexit deal at a key E.U. leadership summit this week, adding to concerns about the potential for a “no-deal” Brexit. Uncertainty around Brexit developments should keep the Bank of England on hold for now, but it is likely watching rising U.K. wage pressures closely.
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