Fisher Investments Editorial Staff
Developed Markets, US Economy, Emerging Markets

On an Up Note

By, 01/04/2011
 

Story Highlights:

  • December data are rolling in, and 2010 looks to have ended on an economic up note.
  • This underscores a key point: Economic recoveries shift gears from slower- to faster-paced all the time—it's normal, and we should expect more of it in the years to come. 

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It's the beginning of another year, but data for December are just now rolling in. It looks like 2010 ended on a positive note. We hope the same holds true for MarketMinder readers.

The widely followed US Institute for Supply Management manufacturing poll showed US manufacturing increased to a seven-month high in December—a result hinted at by some (but not all) recent regional manufacturing surveys. Regional readings were a little choppy, but Chicago PMI stood out by rising six points to 68.6. That beat expectations and marked a two-decade high. Meanwhile, again led by Germany, eurozone manufacturing continued to steadily expand in December. Notably, readings in PIIGS countries Ireland, Italy, and Spain likewise improved. Strong factory output continued in Asia too, and South Korea posted its best result in seven months. 

Also, US retail sales were quite healthy this holiday season. Online sales in particular (an increasingly important sales venue) did well. Consumers spent over $30 billion with a click of their mouses (mice?). And this despite continued high unemployment—though news is better on that front of late too. Average weekly unemployment claims have trended down recently. The US Bureau of Labor Statistics will announce at the end of this week the official December unemployment rate and jobs created—expectations are for mild improvement—and preliminary GDP will hit the books at the end of January.

These are just a few examples that remind us of a prominent worry not six months ago—back then, slowing US economic growth surely meant a double dip. We noted recoveries tend to shift gears from slow to faster-paced and vice versa. That was certainly the case in 2010. What's in store for 2011? You'll hear more on our outlook in the coming weeks. But one thing is sure: There'll be some deviation from the straight and narrow (always is), but shifting leadership or pace doesn't always justify deviating from long-term portfolio strategy.  

*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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