US Economy and Credit Markets Week Ended January 29, 2021

Bob Carey
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US Economy and Credit Markets Week Ended January 29, 2021

Posted Under: Weekly Market Commentary

Treasury yields were little changed last week despite several economic developments. The U.S. economy continued its rebound in the second half of last year, with real GDP growing at a 4% annualized rate in the fourth quarter after growing at a 33.4% rate in the third quarter. Despite rebounding in the second half, the U.S. economy contracted 3.5% in 2020, which is the largest annual decline on record dating back to 1948. The Fed left rates unchanged last week, as expected, keeping monetary policy loose in an effort to boost the economy. Fed Chairman Jerome Powell cited a moderating recovery in recent months and said, "The pandemic still provides considerable downside risks to the economy." Household income grew well above expectations in December, reflecting increases in government stimulus, compensation, and dividend income. Consumer spending fell in December for the second straight month, which combined with higher household income boosted the personal saving rate to 13.7% in December, well above pre-pandemic levels. Major economic reports (related consensus forecasts, prior data) for the upcoming week include Monday: January ISM Manufacturing (60.0, 60.7), January Final Markit US Manufacturing PMI (59.1, 59.1), December Construction Spending MoM (0.8%, 0.9%); Wednesday: January 29 MBA Mortgage Application (N/A, -4.1%), January ADP Employment Change (70k, -123k); Thursday: January 30 Initial Jobless Claims (830k, 847k), December Final Durable Goods Orders (0.2%, 0.2%), December Factory Orders (0.7%, 1.0%); Friday: January Change in Nonfarm Payrolls (58k, -140k), January Unemployment Rate (6.7%, 6.7%), December Trade Balance (-$65.8b, -$68.1b).

Posted on Monday, February 1, 2021 @ 9:10 AM • Post Link	Share:
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These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

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