Monthly Archives: November 2015

Emerging Markets Outlook

Goldman Sachs released their 2016 forecasts for developing countries this week. Their strategists commented that “2016 could be the year EM assets put in a bottom and start to find their feet…There is the prospect of improved growth and better returns, even if it is not a rerun of the roaring 2000s.” The outlook forecasts a 4.9 percent growth rate in 2016 for emerging market economies, up from an estimated 4.4 percent in 2015. This would mark the first expansion in growth since 2010 and would be aided by their weaker currencies and an acceleration in growth in global demand. While this growth estimate remains below historical figures, it still presents an optimistic viewpoint for areas that have been hit by significant pessimism in the recent past. Economists echoed beliefs that emerging markets are more likely to grow over the next 3-6 months than to suffer another downturn, setting up for a positive 2016. Continue reading

U.S. Job Gains Surge in October

The Labor Department released its monthly jobs report this morning, which showed the U.S. added 271,000 jobs in October, shattering the average economist estimate of 185,000 gains. This represents the largest gain since December of last year. Employment gains were strong in retail, construction, and business and professional services. Of the 271,000, 268,000 were created in the private sector, while the government hired 3,000. The under-employment rate, which is the number of people working part-time involuntarily, ticked down to 9.8%, the lowest measure since 2008. Perhaps most impressive, wage growth accelerated nicely, rising to an annualized rate of 2.5%. This has been one of the key metrics that has not moved too much in the past, so a strong wage growth number signals a healthy labor market. Continue reading

U.S. GDP Slows in Third Quarter

The Gross Domestic Product (GDP), the broadest measure of goods and services produced across the economy, rose at a 1.5% annualized rate in the third quarter, the Commerce Department reported yesterday. While this matched the average economist estimate, it shows a slowdown over last quarter, when the annualized rate was 3.9%. Still, the number is strong enough to show the U.S. economy is on solid ground, though growth is not nearly as strong as was previously expected. The reading was hurt most by inventories, which subtracted 1.44% from GDP. Economists expect this to be a one-time fall; it is anticipated that last year’s West Coast port shutdown held back personal spending, which in turn led to accumulating inventory on store shelves. This detraction could simply be stores clearing their inventory, but it is certainly something to keep our eye on. Continue reading