Economy Expanding at a “Modest to Moderate” Pace

U.S. Review

Economy Expanding at a “Modest to Moderate” Pace

• The Federal Reserve received mostly positive reports on the U.S. economy in September. Anecdotal reports in the recent Beige Book were described using particularly upbeat language with increasing accounts of labor market tightening and wage pressure. Economic indicators released this week continued to support the case for a December rate hike.
• Housing data released this week supported our call that single-family housing is poised to drive residential activity in coming years.

Global Review

Growth in China Has Stabilized, at Least for Now

• Real GDP in China grew 6.7 percent on a year-ago basis in the third quarter, unchanged from the rate that was registered in Q2. We forecast that GDP growth will downshift further as investment spending decelerates.
• The British economy appears to have held up fairly well in Q3, despite the shock of the Brexit referendum, although there are signs that economic activity may have lost some momentum heading into Q4.
• As widely expected, the ECB Governing Council made no changes to its policy stance this week.

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