This Week's State Of The Economy - What Is Ahead? - 25 October 2019

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Oct 26, 2019

This Week's State Of The Economy - What Is Ahead? - 25 October 2019

U.S - Looking Back at a Soft Q3

  • Sales of existing homes fell 2.2% to a 5.38 million-unit pace in September, but sales and prices were still up enough in the quarter that they will add solidly to Q3 GDP growth.
  • Overall durable goods orders fell 1.1% in September, reflecting weak demand for aircraft and motor vehicles. Boeing's issues and the GM strike are becoming more apparent in the macro data and are likely to become increasingly so in coming weeks.
  • Sales of new homes fell 0.7% to a 701,000-unit pace in September from a revised 706,000-unit pace the prior month. With mortgage rates down more than a percentage point from last year, housing is set to become a more positive force.

 

Global - The Big Ease-ing

  • The global easing theme was at the forefront this week with rate cuts from several central banks. Turkey's central bank lowered its policy rate 2.50 percentage points, while central banks in Chile, Indonesia and Russia cut rates 0.25%-0.50%.
  • The European Central Bank held monetary policy steady this week, but further easing seems likely at some point. Eurozone October PMIs surprised to the downside, while Q3 GDP growth is expected to slow further from an already sluggish Q2 pace.
  • In Canada, PM Trudeau's Liberal Party won the most seats in this week's election, but fell short of the number needed for an outright majority.



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