U.S. Review
Shall We Do the Real GDP Shuffle?
· Real GDP posted its second consecutive quarterly above-trend gain in the fourth quarter, rising at a 3.2 annual percent pace. Much of the gain in the fourth quarter was concentrated in personal consumption and net exports, as concerns over a
pullback from the outsized contribution from inventories in the third quarter were diminished.
· As expected, the Fed announced an additional reduction in the pace of its asset purchase program. Softer data in recent months, however, bring into question whether the Fed will announce another round of tapering at the March meeting.
· The housing market is showing signs of weakness, but it is still too early to tell if the sector has hit a genuine speed bump.
Global Review
Mixed Data Still Supports Continued Recovery
· Although the data coming out this week was mixed, we are confident that the global economy will continue to heal and economic growth will remain sustainable. It is true that high anxiety ensued last week and this week as emerging market
currencies tumbled, but other data from developed economies like the United Kingdom and Germany have continued to point to improvement.
· The biggest disappointment this week was the 49.5 reading of the HSBC/Markit manufacturing PMI index for China, down from the 50.5 December reading.
Read the full report: Economic Research
Wells Fargo