United States — Solid growth

  • Q3 growth slowed to 1.5% mostly due to inventory drag. Private sector domestic demand up by 3.3% y/y. Home sales, permits, near 8-year high. Unemployment claims at 40-year low. Consumer incomes and spending, construction activity, and capex growing. Leading indicators, confidence point to continued solid domestic growth.

Canada — In transition

  • Q3 likely first quarter of positive growth in 2015. House construction firm, business capex (mostly energy) and government weak. Consumer attitude restrained by resource sector job loss.
  • Mfg. sales ex-petroleum products growing consistently, led by autos. Energy capex plans down sharply. Loonie weakness helping services, tourism, and now mfg.

Eurozone — Improving

  • Q2 was 9th successive quarter of positive growth. Spain has reported solid a Q3, its 10th positive result running. France picking up, Italy improving. Private sector lending up year over year for 8 mos. running after almost 3-year decline.
  • PMIs consistently solid, driven increasingly by domestic demand. Refugee crisis could weigh on consumer sentiment. Inventories may drag on final quarter.

United Kingdom — Growing

  • Q3 GDP growth rate eased to up 2.3% y/y. Led by large services sector, trade. Construction, industrial production weaker. Oil sector subtracted from growth. Employment and income growth strong. PMIs and new orders positive but off best levels.
  • Growth pace sustainable for 2015, but uncertainty around EU membership referendum may weigh on business investment/confidence.

China — Slowing

  • Q2 GDP at 7.0% in line with gov’t full-year target, but internals are mixed/weaker. Fixed asset investment slowing, as is loan growth. Manufacturing PMI improved in August but still in contraction territory, exports growing. Employment, wages growing, consumer confidence improving.
  • Government has cut rates six times, more could come. Some firming in house prices.

Japan — Conflicted

  • GDP growth sagged in Q2, but up year over year. Leading indicators softer, PMIs, corporate earnings, and business confidence firm.
  • Employment, wages growing, consumer confident, spending mixed. Weak oil prices putting inflation targets in jeopardy.

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