Weekly economic update

Economic Update for September 26, 2016   |   Download PDF

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

economy

The Commerce Dept. reported housing starts dropped 5.8% in August. The NAR found existing home sales declined 0.9% in August. The Conference Board Leading Economic Index slipped 0.2% in August. The Nikkei Flash Japan Manufacturing PMI rose to 50.3 in September from 49.5 in August.

employment

Initial jobless claims declined by 8,000 to 252,000 in the week ended September 17, 2016, according to the Labor Department. The four-week moving average was 258,500.

profits

S&P 500 operating earnings-per-share (EPS) declined 1.8% year over year in the second quarter, S&P Capital IQ reported. Five out of 10 of the S&P industry sectors posted EPS growth, led by consumer discretionary. The energy sector posted the largest EPS decline.

emotion

The Bloomberg Consumer Comfort Index fell to 41.3 in the week ended September 18, 2016, from 42.2 in the prior week.

europe

The Markit Flash Eurozone Composite PMI slipped to 52.6 in September from 52.9 in August. Germany's Federal Statistical Office reported producer prices fell 1.6% in August. The Markit Flash Germany Composite PMI fell in August. The European Commission's Flash Consumer Confidence Indicator increased in September. Moody's Investors Service cut Turkey's sovereign credit rating to junk.

rates

The yield on the 10-year U.S. Treasury note declined. The Federal Open Market Committee voted to hold rates steady and indicated that they expect the economy to grow in a way that warrants “gradual increases” in the future. The Bank of Japan maintained the current negative interest rate and set a target of zero for 10-year government bond yields.

risks

  • Political uncertainty surrounding U.S. election cycle
  • Threat of terrorist acts in Europe
  • Constitutional referendum in Italy

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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.