U.S. Outlook: Financial markets go haywire
With recent sharp swings in oil, foreign exchange, and equity markets, it appears the markets are trying to tell us something – but what?
Below are highlights of my weekly economic analysis, followed by a link to the full U.S. Outlook report, delivered on Jan. 9.Key observations:
- The oil price drop and subsequent disruption is a net positive for the economy.
- We estimate real consumer spending growth for the fourth quarter to be 4%.
- The U.S. dollar’s strength is creating downside risks for exports, manufacturing, and business investment in 2015.
- If Eurozone deflation becomes entrenched, it will weigh more heavily on European demand.