Weekly economic update

Economic Update for January 22, 2019   |   Download PDF

Highlights of news-making events of the past week, from the economy and profits to Europe and interest rates.

economy

  • The Producer Price index for final demand declined 0.2% in December, according to the Bureau of Labor Statistics.
  • Both import and export prices fell in December, the Bureau of Labor Statistics noted.

employment

  • Initial jobless claims fell by 3,000 to 213,000 in the week ended January 12, 2019, the Labor Department reported.

profits

  • As of January 9, 2019, of the 20 S&P 500 Index companies reporting fourth-quarter earnings, 16 beat analysts’ estimates, according to S&P Dow Jones Indices.

emotion

  • The University of Michigan’s preliminary index of consumer sentiment dropped to 90.7 in January from 98.3 in December.

europe

  • Euro area annual inflation fell to 1.6% in December from 1.9% in November, according to Eurostat.
  • Eurostat reported that industrial production dropped 1.7% in the euro area in November.
  • The euro area posted a trade surplus in November, Eurostat stated.

rates

  • The yield on the 10-year U.S. Treasury note traded in a range.
  • Most districts reported modest or moderate economic growth in December in the Federal Reserve’s Beige Book.

risks

  • The Fed risks a policy error if they do not re-evaluate the interest-rate path and terminal size of the balance sheet.
  • Brexit, Italian debt dynamics, and the re-emergence of populism risk tipping Europe back into recession.
  • Weak stimulus in China thus far is showing little sign of slowing the pace of deceleration.

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All economic and performance information is historical and does not guarantee future results. The views and opinions expressed are those of Putnam Investments, are subject to change with market conditions, and are not meant as investment advice.