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OPINION

Next week's economics: 30 Nov - 4 Dec

Next week's economics: 30 Nov - 4 Dec
November 26, 2015
Next week's economics: 30 Nov - 4 Dec

In the US, the ISM survey could show that manufacturing output is barely growing at all. Friday's non-farm payroll numbers might look slightly better, showing net growth of around 200,000 jobs. But even this would only be consistent with GDP growth of around 2 per cent - well below its pre-crisis average.

In the eurozone, final purchasing managers' surveys are likely to confirm flash estimates, which showed both manufacturing and services growing only slowly. These are consistent with real GDP growing at only around 1 per cent a year. This is not enough to reduce unemployment, which Tuesday's figures are likely to show is stuck at 10.8 per cent of the workforce, and at over 22 per cent for under-25s.

In part, the ECB is to blame for this. Although Wednesday's figures could show that inflation has risen as last November's fall in oil prices drops out of the data, they'll also show that the 'core' rate (which excludes food and energy) is only around 1 per cent. This is significantly below the ECB's target of just under 2 per cent, which means that monetary policy was too tight a few months ago. In this sense, the ECB is partially responsible for the eurozone's weakness.

Another cause of this weakness is, of course, China. We might, however, get a glimmer of good news here. Purchasing managers might say on Tuesday that manufacturing activity is weakening by less than it did in the past three months. Things might not be getting better, but at least they're not getting much worse.

News from the UK, by contrast, might be relatively good. Purchasing managers might report decent growth in manufacturing and services, albeit perhaps not as strong as a few months ago.

There, will, however, be some concerns. Bank of England figures on Monday could show that companies are building up cash - their bank deposits might have grown by more than 13 per cent in the past 12 months - and not borrowing. This is consistent with an ongoing lack of desire to invest. By contrast, consumer credit growth could be accelerating, despite the fact that rising real wages have given households the chance to pay off debt. This juxtaposition suggests that UK growth is still consumer-led - which might not be sustainable.