January 17 ,2020
U.S. Passes Global Growth Baton to Rest of World, For Now
“America’s days as pace-setter for the world economy may be coming to an end. With the International Monetary Fund releasing new forecasts on Monday, a rising number of economists are predicting that the U.S.’s momentum will fall behind that of the rest of the world as global growth bottoms out and looks set to slowly pick up in 2020. “The world leads and the U.S. lags,” Joachim Fels, global economic adviser for Pacific Investment Management Co., which oversees $1.91 trillion in assets, told Bloomberg Television. In one of the more pessimistic forecasts out there, Pimco predicts the U.S. expansion could slow to about 1% in the first half of this year before accelerating.”
U.K. Retail Sales Extend Worst Run on Record
“British consumers shunned stores during the crucial Christmas trading period, confounding predictions of a rebound in spending and stoking speculation that the Bank of England will cut interest rates this month. The pound fell after the report, the latest in a string of disappointing U.K. data in recent days, and traders moved to price in a 75% chance of a cut at the BOE’s Jan. 30 meeting. The volume of goods sold in stores and online fell 0.6% in December, confounding expectations of a 0.6% increase. Sales excluding auto fuel dropped 0.8%. The period included Black Friday and Cyber Monday, when price cuts would be expected to attract shoppers to stores.”
China’s Upbeat Economic Data Hints at More Policy Moderation
“China’s economy displayed greater-than-expected strength in December, handing President Xi Jinping’s government vindication of its new-found moderation in stimulus and suggesting the approach will continue through 2020. The world’s second-largest economy grew 6% in the final quarter of the year, holding pace despite fears that the domestic struggle with bad debt and the trade war with the U.S. would result in further deceleration. Instead, investment picked up for the first time since June.”
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