According to an initial estimate by the State Secretariat for Economic Affairs (SECO), the Swiss economy grew by 0.4 percent in the third quarter. This growth was driven primarily by solid consumer spending among the Swiss population, as shown by the PostFinance consumption indicator over several months, and also a slight recovery in construction activity. However, the domestic economy still appears to be on somewhat shaky ground. Company investment activity, which generally shapes the economic cycle, has been declining for around one and a half years. Swiss foreign trade is trending better, albeit with strong fluctuations, with Swiss goods exports for example reaching a new high in October. Exports of chemical and pharmaceutical products in particular increased by more than 20 percent month-on-month.  

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The US economy continues to perform robustly. Private household incomes have recently risen much more strongly than in summer and autumn this year, which should ease the pressure on household budgets somewhat and help shore up consumer spending, an expectation also suggested by the fact that the signs of weakness on the labour market have not grown any stronger. New applications for unemployment benefit have fallen again recently, and for the time being the unemployment rate has halted the upward trend seen since the beginning of the year. By contrast, business activity in the industrial sector and construction activity continue to decline. Inflation also remains a challenge. The overall rate has risen again recently and at 3.3 percent, the core inflation rate, which excludes volatile price components and is a crucially important factor in monetary policy, is still well above the target set by the Federal Reserve (Fed). 

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The latest economic data from the eurozone, almost without exception weaker than the previous month, proved disappointing. In November, the mood among both industrial companies and service providers and among consumers turned more pessimistic. In addition, industrial production continued to decline and companies reported a fall in employment for the fourth month in a row. Any economic recovery would therefore seem to have been pushed further into the future. This economic weakness is largely down to the performance of Germany and France, the two largest economies, while the other eurozone countries performed solidly on average.

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The economic data from China, the biggest emerging market and the world’s second-largest economy, has recently improved slightly. The mood among industrial companies turned more optimistic and consumption, as measured by retail sales, also returned to a solid growth path. However, there are still too few indicators pointing in a positive direction to be confident of any sustainable recovery. Price trends remain extremely weak. Consumer prices rose by only 0.2 percent year-on-year, which for an emerging economy with growth rates of several percentage points is exceptionally low, and the fall in real estate prices continued unabated. In addition, the fiscal policy measures announced to date and the monetary policy measures already implemented are unlikely to be enough to restore any real momentum to economic performance.

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