US economy is running on one engine. This has been a repeated statement throughout 2019, that has also been adopted by Jerome Powell, the Governor of the FED. The manufacturing engine is dysfunctioning. US manufacturing growth is slowing. The latest US manufacturing PMI was 51.3 and the latest ISM manufacturing PMI was far below the 50 threshold, that separates expansion from contraction, at 48.3. The same applies to European manufacturing PMI that stands at 45.9 and to Chinese manufacturing activity. Latest Chinese industrial profits were almost -10% y/y.
The consumption engine, on the other hand, is running perfectly. The upcoming Black-Friday gives us a reason to present the bellow chart compiled by DB Global Research. It compares the US Consumption contribution to global GDP, with the total GDP of China, Japan, Germany, UK and Italy. US Consumption is significant.
Macro releases: Earlier today, Switzerland recorded a higher than expected GDP number. Today’s economic calendar includes the EU private loans and EU M3. Healthy readings are expected. US is celebrating Thanksgiving and US markets will be closed.
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