Drifting Less, Steering More - November’s Data Finds Direction

The week brought economic, market, and political developments that point to moderate growth and greater uncertainty. On the economic front, the FOMC minutes revealed a divided committee: although most members see room for future rate cuts, several are hesitant about cutting in December due to persistent inflation. This caution is compounded by signs of a cooling labor market: in September, 119,000 jobs were created, more than double the expected number, but unemployment rose to 4.4%, its highest level in four years, and wage growth moderated. The cancellation of the October report due to the government shutdown left the Fed with less visibility for its December 10 meeting.

Other indicators show an economy still expanding, albeit with less momentum. Existing home sales grew 1.2% in October, reaching their highest level in eight months, with prices on the rise. The trade deficit narrowed due to falling imports and a slight increase in exports, suggesting firm external demand and less pressure on the current account. Durable goods orders rose 2.9% in August, while the composite PMI for November stood at 54.8, driven by solid services despite a marginal decline in manufacturing. Overall, the data reinforce the view of a moderate slowdown, with less inflationary pressure but no signs of contraction.

READ MORE