The economic setting within the United States as the new year commences is largely constructive. Data received in the latter weeks of 2016 were encouraging, and there seems to be an improving economic sentiment.
The first significant U.S. economic release of the new year was a solid one. The U.S. Department of Labor reported this morning that 156,000 new jobs had been created in December.
As the Federal Reserve prepares for its final monetary policy gathering of 2016, it will look back on a year of inactivity and look forward to a year that could very well be an active one.
The U.S. bond market has retreated since the election. Long-term yields have risen by almost 40 basis points. It appears that the 30-year-old bull market in bonds is really over.
Needless to say, the surprise victory of Donald Trump in the U.S. presidential election has changed the economic outlook on many fronts.
A mistake many in my profession have made in the past year has been underestimating the difference between overall economic performance and its translation to the fortunes of constituents. This was at the heart of the Brexit vote last June and was the driving force behind yesterday’s U.S. outcome.
At the three-quarter pole, the global economy is muddling through a disappointing 2016. Growth in developed and emerging markets continues, but at a pace that has fallen short of expectations.
There were concerns throughout the summer that U.S. economic conditions had weakened. Based on incoming reports, though, the weight of economic evidence remains positive.