Weekly economic update

Economic Update for December 10, 2018

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

economy

  • Construction spending fell 0.1% in October, the Commerce Department stated.
  • The trade deficit surged in October, reaching a 10-year high, the Commerce Department reported.
  • Factory orders declined 2.1% in October, the Commerce Department noted.
  • Durable goods orders fell 4.3% in October, according to the Commerce Department.

employment

  • Initial jobless claims fell by 4,000 to 231,000 in the week ended December 1, 2018, according to the Labor Department.
  • The U.S. added 155,000 jobs and the unemployment rate remained unchanged at 3.7% in November, according to the Bureau of Labor Statistics.

profits

  • As of November 30, 2018, of the 488 S&P 500 Index companies reporting third-quarter earnings, 376 — or 77.0% — beat analysts’ estimates, according to S&P Dow Jones Indices.

emotion

  • The University of Michigan’s index of consumer sentiment remained unchanged at 97.5 in December.

europe

  • Eurostat reported that retail trade rose 0.3% in October.
  • GDP grew 0.2% in the third quarter, Eurostat stated.
  • Eurozone industrial producer prices rose 0.8% in October, according to Eurostat.
  • Germany’s Federal Statistical Office reported that factory orders advanced 0.3% in October.

rates

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

risks

  • The strengthening U.S. dollar and widening credit spreads are putting pressure on select emerging markets.
  • The risk of a no-deal Brexit and a looming confrontation between the European Commission and Italy could tip Europe back into recession.
  • The Fed appears to be on course to invert the yield curve.