This Week's State Of The Economy - What Is Ahead? - 20 December 2019

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Dec 21, 2019

This Week's State Of The Economy - What Is Ahead? - 20 December 2019

U.S. - Review Expansion Poised to Continue into the Next Decade

  • President Trump became the third president in U.S. history to be impeached by the House, but removal by the Senate is highly unlikely. The House also passed the USMCA, which should be signed into law in early 2020. This, along with the phase one deal announced last Friday, should remove some uncertainty as we head into the new year.
  • Boeing announced it is halting production of the 737 MAX. We estimate this will drag 0.5 points off Q1 GDP growth.
  • November industrial production jumped, but it was largely due to GM resuming production post-strike. Residential activity continues to post solid gains.

 

Global Review - Chinese Data Better, Eurozone Mixed, Banxico Cuts

  • The international economic data started the week on a positive note, as data out of China showed a broadly encouraging picture for November.
  • The preliminary Eurozone PMIs for December were more mixed. The manufacturing sector PMI gave back November’s gain, but the service sector PMI resiliently remained in expansionary territory.
  • Both the Bank of England and Bank of Mexico met this week, with the former keeping rates steady and the latter cutting its main policy rate 25 bps, the fourth time it has done so this year.



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