Recent economic news in the US continues to be favourable. The unemployment rate dropped to 6.9% in October 2020 from 7.9% in September, comparing favourably with market expectations of 7.7%. Average hourly earnings for private non-farm payrolls rose by +0.1%, month-on-month (MoM) in October, while year-on-year (YoY) average hourly earnings increased by +4.5%. Despite the political uncertainty of recent weeks, in the background, the US economy has been continuing its recovery.
In China, the positive trends we’ve been reporting on for the last few weeks have continued. Exports from China jumped by +11.4% in October, beating the market consensus of +9.3%. This is the fifth straight month of increasing outbound shipments, and the fastest rise in 19 months. Meanwhile, imports to China rose by +4.7% YoY after a +13.2% surge in the previous month. This suggests something we have mentioned previously: China looks as though it is pulling up economic dynamics in other parts of Asia, and perhaps the world, as its economy recovers.
Even in Europe, some data are beginning to look better. Industrial production in Germany jumped +1.6% MoM in September – the fifth straight month of gains (although industrial activity remains significantly below pre-pandemic levels). The Eurozone economy also rebounded more-than expected in Q3 2020, with GDP surging +12.7% against the previous quarter. To be clear, the recovery in Europe is still much weaker than in the US and China, and signals are mixed. But, based on the most recent data coming out of the bloc, you could argue that the dynamics are starting to turn more positive.
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