The ISM non-manufacturing index, covering approximately 85% of the economy, rose +1.1 points to 55.0 in December, well above the 50 line indicating expansion.
As expected the Federal Reserve left interest rates unchanged at Wednesday’s meeting and signaled that further cuts in 2020 are less likely than previously thought. The House of Representatives is weighing article of impeachment against President Trump, and a vote in the full House, which is almost certain to pass, is expected next week. The economy is also decelerating, and leading indicators of a slowdown next year are abundant, suggesting GDP growth for 2020 of only 1.6%.
Once again, we are in the uncomfortable position of having to give a rational analysis of the macroeconomy in the face of a euphoric stock market. The stock market frequently disconnects with glee from the macroeconomic data. Read more from Dan North.
Since 1996, Dan North has been with Euler Hermes, the world’s oldest and largest credit insurance company. As the company’s chief economist for North America, he uses macroeconomic and quantitative analyses to help manage Euler Hermes’ risk portfolio of more than $250 billion in annual trade transactions within the region.
As one of the leading U.S. economists, Dan North has appeared on CNBC, Fox Business News, ABC News Now, France 24, and Bloomberg Radio and Television. He has been quoted by USA Today, Barron’s, Bloomberg Business Week, The Washington Post, Paris Le Monde, and The Wall Street Journal. After having predicted the 2008/2009 recession and its implications accurately, Dan North was ranked 4th on Bloomberg’s list of the 65 top economic forecasters in 2010.