The U.S. economy continues to start 2021 on a high note

Wells Fargo Research Team Wells Fargo

Summary

U.S. Review

In January, personal spending increased at a robust 2.4% pace, while personal income soared 10.0%.The core PCE deflator rose 0.3% during the month and 1.5% over the year. Fed Chair Powell testified in front of Congress and underscored the FOMC's commitment to keep monetary policy accommodative, as the U.S. economy continues to recover from the COVID crisis.
Pending home sales dropped 2.8% in January, reflecting some moderation in the housing market. Durable goods orders jumped 3.4% in January, besting consensus estimates. Jobless claims unexpectedly fell to 730K during the week ending February 20. The Leading Economic Index (LEI) jumped 0.5% in January. Consumer sentiment (University of Michigan) dipped to 76.8 in February.

Global Review

Central Banks on Hold This Week

The Reserve Bank of New Zealand (RBNZ) met this week to discuss policy, opting to maintain its Official Cash Rate at 0.25% and leaving its Funding for Lending program and Large Scale Asset Purchase program unchanged. Separately, the New Zealand government instructed the RBNZ to keep house price sustainability in mind when making its policy decisions.
The Bank of Korea also held policy steady, leaving its seven-day repo rate unchanged at 0.50%, a record low. The central bank maintained its growth forecasts, but noted that its inflation expectations for 2021 have risen.
The Swedish economy unexpectedly contracted in the fourth quarter of 2020, driven mainly by a fall in household consumption and changes in inventories.

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Wells Fargo Research Team

Wells Fargo

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