Market and economic update: November ends with flurry of economic data

Despite the Thanksgiving holiday, the end of November came with a flurry of economic data. Stronger third-quarter GDP growth, revised up to 3.9% from 3.5%, was met by weakening data for October and slipping consumer confidence in November.

This weaker trend in U.S. economic data seems to indicate that fourth-quarter economic activity may be modestly slower than the strong pace seen in the third quarter. As we progress to the end of the year, economic data will likely indicate economic activity slowing toward a 3% pace, which should carry through in the new year.

Monetary authorities outside the United States have been engaged in stimulating economic activity. The Bank of Japan nearly doubled its planned quantitative easing (QE) plan, the European Central Bank is transitioning from refinancing operations into a modest QE program, and the People’s Bank of China cut interest rates last week. Inflation pressures continue to ease, allowing operating room for global central banks. OPEC’s decision to maintain its current rate of oil output is likely to lead to further deflationary pressure in the global economy.

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