Weak exports may crimp U.S. fourth-quarter economic growth
U.S. economic growth likely slowed in the fourth quarter as a plunge in shipments of soybeans weighed on exports, but a healthy increase in consumer spending and rising business investment should underscore the economy’s underlying momentum. Gross domestic product probably increased at a 2.2 percent annual rate after accelerating at a 3.5 percent pace in the third quarter, according to a Reuters survey of economists. The government will publish its first estimate of fourth-quarter GDP on Friday at 8:30 a.m. But fourth-quarter GDP data could surprise on the upside after data on Thursday showed a drop in the goods trade deficit in December and a jump in wholesale inventories. The Atlanta Federal Reserve is forecasting the economy growing at a 2.9 percent rate in the fourth quarter. Economists estimate trade could have subtracted as much as 1.5 percentage points from GDP growth in last quarter, reversing the 0.85 percentage point contribution in the third quarter.
Euro zone lending picks up, driven by cheap ECB cash
Euro zone lending inched up to multi-year highs in December, fresh data showed, indicating that the European Central Bank’s cheap cash is slowly making its way through the economy, if not fast enough for policy to be tightened soon. Hoping to revive lending to fuel growth and inflation, the ECB has cut rates into negative territory, offered banks free loans and has bought 1.5 trillion euros’ worth of assets, keeping borrowing costs at record lows. Inflation in the euro zone jumped to 1.1 percent in December from 0.6 percent in November, and hawks have argued for reduced stimulus. But ECB President Mario Draghi last week made clear that he was not convinced the inflation recovery is sustainable, so there has been no discussion yet about ending the bank’s policy of easy money.
Brazil tax revenues down 3 pct in 2016 as recession lingers
Brazil collected 1.29 trillion reais ($416 billion) in federal taxes in all of 2016, down 2.97 percent in real terms from last year due to a two-year recession that has destroyed hundreds of businesses and left millions unemployed. Tax collection dropped 1.19 percent to 127.607 billion reais in December from the same month a year ago.