Economic and market updates

Economic Update for December 5, 2016

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

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economy

The BEA reported that GDP grew at an annual rate of 3.2% in the third quarter. Consumer spending rose 0.3% and construction spending increased 0.5% in October. Manufacturing grew in November, the ISM found. The NAR stated pending home sales rose 0.1% in October. Home prices posted a 5.5% annual gain in September, S&P CoreLogic/Case-Shiller noted.

employment

The Labor Dept. reported the United States added 178,000 jobs and the unemployment rate fell to 4.6% in November from 4.9% in October. Initial jobless claims rose 17,000 to 268,000 in the week ended November 26, 2016, the Labor Dept. noted. The four-week moving average was 251,500. The ADP National Employment Report stated the private sector added 216,000 jobs in November.

profits

As of November 30, 2016, of the 490 S&P 500 Index companies reporting third-quarter earnings, 346 — or 70.6% — beat analysts' estimates, according to S&P Dow Jones Indices.

emotion

The Conference Board Consumer Confidence Index increased significantly in November in the United States. The European Commission's Economic Sentiment Indicator for the euro area remained flat and the Business Climate Indicator declined in November.

europe

Eurostat reported that euro area unemployment fell to 9.8% in October from 9.9% in September. Euro area inflation rose to 0.6% in a November flash estimate and industrial producer prices were up by 0.8% in October. Germany's Federal Statistical Office found that import prices slipped 0.6% in October and consumer prices rose an estimated 0.8% in November.

rates

The yield on the 10-year U.S. Treasury note rose.

risks

  • Uncertain GDP impact of President-elect Trump's fiscal and trade policies
  • Deflating house prices in major cities across China
  • Populist political momentum across Europe

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.

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