Weekly economic update for January 9, 2023

Weekly economic update for January 9, 2023

Putnam Investments | January 9, 2023

Highlights of key economic statistics from last week compiled by Putnam Investments.

economy

  • The S&P Global U.S. Manufacturing PMI fell to 46.2 in December from 47.7 in November.
  • Construction spending rose 0.2% in November compared with October, the Census Bureau found.
  • The trade deficit decreased in November, the Census Bureau reported.
Employment

  • Initial jobless claims fell by 19,000 to 204,000 in the week ended December 31, 2022, according to the Department of Labor.
  • The U.S. added 223,000 jobs and the unemployment rate fell to 3.5% in December from 3.6% in November, according to the Bureau of Labor Statistics.
Profits

  • As of December 30, 2022, of the 16 S&P 500 Index companies reporting fourth-quarter earnings, 13 beat analysts’ estimates, according to S&P Dow Jones Indices.
Emotion

  • The European Commission’s Economic Sentiment Indicator for the euro area rose in December.
Europe

  • The S&P Global Eurozone Composite PMI Output Index rose to 49.3 in December from 47.8 in November.
  • Eurostat noted euro area annual inflation is expected to fall to 9.2% in December from 10.1% in November.
  • Eurostat reported euro area industrial producer prices fell 0.9% in December compared with November.
Rates

  • The yield on the 10-year Treasury note plunged.
Risks

  • High energy prices, worsened by the Russia-Ukraine War, increase the risk of stagflation and recession, even as central banks seek monetary policy normalization.
  • Declining liquidity and deteriorating financial conditions, combined with high valuations, are contributing to a substantial uptick in risk asset volatility.
  • Global leverage is at worrisome levels and will eventually need to be paid for, at a time when most developed markets are facing a fiscal drag from the end of post-pandemic stimulus.

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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.

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