Overarching Economic Themes Remain in Place

Wells Fargo Research Team Wells Fargo

US Review

Overarching Economic Themes Remain in Place

Retail sales increased for a fourth straight month in January, underscoring the resiliency of the U.S. consumer. Fundamentals are solid and support our expectations for healthy consumer spending gains in coming months.

The industrial sector remains challenged, however, as total production declined for the fourth time over the past five months.

The U.S. economy remains firmly on its expansion path, yet we are mindful of the risks to the outlook, including the ongoing coronavirus threat. Amid what should be a soft start, we look for U.S. real GDP to increase 2.0% this year.

Global Review

China Near-term Outlook Remains Challenging

A revision to diagnosis methodology led to a nearly 30% jump in new reported cases of coronavirus in China, and while many of those cases are days or weeks old, the revision only raises further questions over the extent to which China's economy will be affected by the outbreak. Still, the country's top officials have been resolute that the country can still hit its 2020 GDP targets.

The Eurozone is among the more exposed major developed economies—bad news for its already struggling manufacturing sector, especially in Germany, which is the most exposed to China of the Eurozone's major economies.

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EUR/USD hits two-day highs near 1.1820

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