November 2017
Despite hurricane-related disruption, the US economy posted strong third-quarter growth, expanding by 3.3% YoY. Meanwhile, President Donald Trump announced tax reforms designed to reduce corporate taxes and cut inheritance taxes. Fed Chair Janet Yellen is to be replaced with President Trump’s preferred candidate, Jerome Powell.
- The Dow Jones Industrial Average Index breached 24,000 points for the first time
- President Trump’s approval ratings have dropped since his election in November 2017
- October’s jobs data disappointed investors
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Despite the disruption caused by Autumn hurricanes, the US economy posted strong growth for the third quarter, expanding at an annualised rate of 3.3%. Growth was underpinned by robust investment and export activity that helped to offset a slowdown in consumer spending growth.
“Since the nadir of the financial crisis on 9 March 2009, the Dow has risen by almost 271%”
As November drew to a close, the Dow Jones Industrial Average Index breached 24,000 points for the first time ever. According to S&P Dow Jones Indices, the benchmark index has experienced 17 new highs so far this year, and has breached 20,000, 21,000, 22,000, 23,000, and now 24,000 points in the last 11 months. Since the nadir of the financial crisis on 9 March 2009, the Dow has risen by almost 271%. Over November as a whole, the Dow Jones Industrial Average Index rose by 3.8%, while the Nasdaq Index climbed by 2.2%. The S&P 500 Index rose by 2.8%, and all 11 of its sectors ended November in positive territory.
President Donald Trump announced tax reforms designed to reduce corporate taxes and cut inheritance taxes. Although the proposals triggered concerns that they would put pressure on the middle classes, President Trump described the measures as a “big, beautiful Christmas present” for American families. President Trump’s approval ratings have registered a marked decline since his election one year ago, according to a poll conducted by the Washington Post and ABC News. Mr Trump’s “disapproval” rating has risen to 59%, 53% believe he has not handled the economy well, and 55% believe he has not fulfilled many of the pledges made during his Presidential campaign.
The Federal Open Market Committee (FOMC) voted to maintain the federal funds rate at 1-1.25% during November. Although further “gradual” rises remain on the cards – perhaps as early as December – inflation has remained generally “soft”. During the month, President Trump announced that that current Federal Reserve Chair Janet Yellen will be replaced when her term ends in early 2018 with his own favoured candidate, Jerome Powell.
October’s labour market data proved disappointing for investors: despite the fact that the economy added 261,000 jobs during the month, the amount was lower than expected following hurricane-related disruptions in September; moreover, annualised growth in average earnings declined to 2.4% in October. On a brighter note, the rate of unemployment fell from 4.2% to 4.1% to reach its lowest level since December 2000.
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