For more information, visit http://www.worldbank.org/prospects December 8, 2017 Taking Stock U.S. nonfarm job growth remained solid in November; service sector growth softened. U.S. nonfarm payrolls rose by 228,000 (m/m, sa) in November, above market expectations. Nonfarm employment for October was revised down from 261,000 to 244,000. The unemployment rate held steady at 4.1 percent (Figure 1). The labor-force participation rate remained unchanged at 62.7 percent. Average hourly earnings for private sector workers rose 2.5 percent (y/y) in November, up from 2.3 percent in October. Separately, the U.S. Institute for Supply Management (ISM) non-manufacturing index fell from 60.1 in October to 57.4 in November, suggesting that growth in the service sector eased while remaining solid (a reading above 50 indicates expansion). Euro Area GDP growth held steady in Q3; retail trade declined in October. Euro Area GDP growth in Q3 was confirmed at 0.6 percent (q/q, sa), slightly below the 0.7 percent in Q2, as a pickup in exports was offset by slower growth in investment and household consumption expenditure. Meanwhile, the Euro Area’s volume of retail trade decreased by 1.1 percent (m/m, sa) in October against a 0.8 percent increase in September, due to a decline in the sale of food and non-food products. Japan’s Q3 GDP growth was revised up; service sector growth slowed in November. Japan’s GDP growth in Q3 was revised from 0.3 percent (q/q, sa) to 0.6 percent (Figure 2). The upward revision reflected stronger-than-previously-estimated private non-residential investment, which partially offset a decline in private consumption. Separately, the Nikkei Japan services purchasing managers’ index (PMI) fell to 51.2 in November from 53.4 in October, suggesting that growth in the service sector slowed as input prices rose (a reading above 50 indicates expansion). China’s exports growth accelerated in November; Caixin service PMI rose. China’s exports, in U.S. dollar terms, rose 12.3 percent (y/y) in November from 6.9 percent in October, due to strong global demand. Import growth picked up to 17.7 percent (y/y) from 17.2 percent in October, as China’s commodity demand continued to rise. China’s trade surplus rose to $40.2 billion in November from $38.2 billion in October. Separately, the Caixin service PMI—an independent gauge of China’s services sector activity—rose to 51.9 in November from 51.2 in October (a reading above 50 indicates expansion), indicating that activity in China’s service sector expanded at a faster pace in November. South Africa’s economic recovery continued in Q3. South Africa’s GDP rose 2.0 percent (q/q, saar) in Q3, following a 2.8 percent expansion in Q2. The largest contribution to growth in Q3 came from the agricultural sector. The performance of the manufacturing sector was solid, and mining output continued to expand at a robust pace. However, growth in the rest of the economy was subdued. Figure 1 U.S. unemployment rate held steady in November. Figure 2 Japan’s Q3 GDP growth was revised up to 0.6 percent. U.S. civilian unemployment rate Real GDP growth Percent Percent, q-o-q, sa 8 3.0 7 2.0 6 1.0 5 0.0 4 -1.0 3 -2.0 May-13 May-14 May-15 May-16 May-17 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 3Q-10 1Q-11 3Q-11 1Q-12 3Q-12 1Q-13 3Q-13 1Q-14 3Q-14 1Q-15 3Q-15 1Q-16 3Q-16 1Q-17 3Q-17 Source: Bureau of Labor Statistics. Sources: Haver Analytics. Produced by DECPG. Number 370 | December 8, 2017 Major Data Releases (Percent change y-o-y) (Percent change y-o-y) Recent releases: Friday, 1 December - Thursday, 7 December 2017 Upcoming releases: Friday, 8 December - Thursday, 14 December 2017 Country Date Indicator Period Actual Forecast Previous Country Date Indicator Period Previous Romania 12/5/17 GDP Q3 8.6 % 8.8 % 5.9 % Brazil 12/8/17 CPI NOV 2.70 % Hungary 12/5/17 GDP Q3 3.9 % 3.6% 3.2 % China 12/8/17 CPI NOV 1.9 % Bulgaria 12/5/17 GDP Q3 3.9 % 3.9 % 3.6 % Turkey 12/11/17 GDP Q3 6.5 % South Africa 12/5/17 GDP Q3 0.8 % 1.0% 1.1 % Poland 12/11/17 CPI NOV 2.1 % Slovakia 12/5/17 GDP Q3 3.4 % 3.3 % UK 12/12/17 CPI OCT 3.0 % Euro Area 12/7/17 GDP Q3 2.6 % 2.5 % 2.4% United States 12/13/17 CPI NOV 2.0 % Activity and Inflation (Percent change y-o-y, except quarterly data on industrial production, which are percent change q-o-q, annualized) 2016 2017 2016 2017 2015 2016 Q4 Q1 Q2 Q3 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 1 Industrial Production, sa World 1.8 2.0 4.9 3.7 5.0 3.2 3.2 3.6 3.0 3.3 3.9 3.8 4.3 4.0 4.2 4.2 4.2 4.4 Advanced Economies 0.2 0.2 4.0 1.5 4.4 2.4 2.0 2.6 1.1 2.2 2.3 2.5 3.2 3.0 3.0 3.2 3.0 3.7 Emerging Market and Developing Economies 3.5 3.9 6.0 5.9 5.6 4.0 4.4 4.6 5.0 4.4 5.6 5.1 5.5 5.0 5.4 5.2 5.5 5.2 Commodity-exporting EMDE -1.2 0.0 0.5 2.8 5.0 3.3 1.0 2.1 2.0 1.1 1.7 2.5 3.9 1.0 2.3 3.3 3.1 - Other EMDE 5.1 5.1 7.5 6.8 5.8 4.2 5.4 5.3 5.8 5.3 6.7 5.8 6.0 6.1 6.3 5.8 6.2 5.7 East Asia and Pacific 5.8 5.9 6.3 7.2 6.4 4.6 5.9 6.0 6.2 6.1 7.4 6.3 6.4 6.6 6.0 5.9 6.5 6.0 East Asia excl. China 3.6 4.6 4.2 4.9 2.2 7.9 4.4 6.3 4.6 5.1 6.0 4.8 5.6 0.8 3.5 4.8 6.0 - Europe and Central Asia 1.5 2.0 9.3 5.4 8.0 2.5 2.7 2.7 4.3 1.4 4.3 4.4 6.4 4.9 6.7 6.0 6.1 5.4 Latin America and Caribbean -2.8 -2.4 -0.5 0.8 0.6 1.9 -0.4 1.2 0.1 0.3 -0.7 -0.3 0.9 0.0 0.4 1.4 0.3 - Middle East and North Africa -3.3 -7.0 25.0 20.0 21.1 11.4 -4.7 10.3 13.1 17.1 4.7 21.0 20.3 23.1 30.8 15.3 12.4 - South Asia 3.5 5.2 6.7 4.9 1.6 5.1 5.1 2.8 4.2 1.9 5.4 4.6 3.5 0.1 3.9 4.5 5.3 - Sub-Saharan Africa -0.3 0.9 -2.5 -4.4 2.9 4.2 1.1 -0.9 0.1 -2.5 -2.1 -0.5 -1.9 -2.7 -0.5 1.1 -0.6 - Inflation, sa 2 World 1.4 1.5 1.7 2.6 2.2 2.3 1.7 2.0 2.3 2.5 2.7 2.4 2.2 2.0 2.2 2.2 2.2 2.3 Advanced Economies 0.1 0.3 0.8 1.6 1.4 1.5 0.7 1.1 1.5 1.8 1.5 1.9 1.5 1.2 1.4 1.5 1.5 1.4 Emerging Market and Developing Economies 2.4 2.7 2.7 3.3 3.1 3.0 2.6 2.7 3.0 3.3 3.5 3.5 3.1 2.8 2.9 3.2 3.2 3.5 Commodity-exporting EMDE 3.7 3.5 3.3 3.4 3.4 3.3 3.4 3.3 3.5 3.5 3.5 3.7 3.5 3.1 3.1 3.4 3.1 3.6 Other EMDE 1.0 1.1 1.7 3.1 3.0 2.9 1.6 1.8 2.6 3.2 3.5 3.2 2.9 2.3 2.5 2.9 3.4 3.4 East Asia and Pacific 1.2 2.0 2.5 2.7 2.9 2.4 2.4 2.6 2.7 3.4 3.5 3.2 2.9 2.4 2.3 2.6 3.1 3.2 Europe and Central Asia 1.9 0.4 1.0 2.4 2.4 2.7 0.9 1.6 2.3 2.5 2.7 2.6 2.7 2.2 2.4 2.6 2.8 2.6 Latin America and Caribbean 2.7 2.4 2.8 3.0 2.7 3.2 2.8 2.7 2.7 3.0 3.0 3.1 2.9 2.2 2.9 3.3 3.6 3.5 Middle East and North Africa 1.8 2.7 2.0 2.6 1.5 1.1 2.0 1.8 2.3 2.3 2.9 1.7 1.9 1.0 1.1 1.1 1.7 2.3 South Asia 4.5 4.4 4.7 4.3 4.5 3.4 4.6 3.8 3.7 4.1 4.9 4.8 4.9 3.9 3.0 3.4 3.9 3.8 Sub-Saharan Africa 3.6 5.2 5.7 5.7 5.1 4.8 5.9 5.7 5.8 5.8 4.9 4.5 5.4 5.4 5.4 5.3 3.8 5.0 Sources: World Bank, Haver Analytics, and IMF International Financial Statistics. 1 Industrial production is total production (may exclude construction). When data are unavailable, "industral production, manufacturing" is used as a proxy. 2 Median inflation rate for each grouping. Trade and Finance (Percent change y-o-y, except quarterly trade data, which are percent change q-o-q, annualized, and international reserves data, which are percent change over the previous period) 2016 2017 2016 2017 2015 2016 Q4 Q1 Q2 Q3 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Exports, Nominal, US$, sa World -11.6 -3.0 8.8 19.4 3.0 12.1 5.1 4.0 11.0 7.7 12.9 3.9 11.2 7.6 10.2 10.7 11.2 - Advanced Economies -11.4 -0.8 5.4 19.4 1.4 17.3 6.3 5.6 10.2 8.1 10.7 1.2 10.4 6.6 9.9 10.5 11.3 - Emerging Market and Developing Economies -11.9 -6.5 15.4 19.6 5.9 3.2 3.4 1.6 12.6 6.9 17.0 8.8 12.8 9.6 10.6 11.0 10.9 - Commodity-exporting EMDE -24.2 -9.2 29.4 39.3 -12.1 13.1 8.9 7.8 26.5 19.1 23.2 13.3 19.4 9.7 16.1 16.1 14.9 - Other EMDE -3.7 -4.6 10.3 12.3 14.3 0.0 1.8 -0.4 7.5 2.2 14.7 7.1 10.3 9.5 8.6 9.2 9.5 9.9 East Asia and Pacific -3.5 -6.1 11.0 13.1 16.1 -1.6 1.8 -2.1 8.8 2.2 15.6 8.9 11.3 9.3 10.4 8.1 9.8 9.9 Europe and Central Asia -20.7 -6.1 19.7 35.0 -4.1 16.3 6.5 7.6 22.5 12.4 20.8 5.6 19.3 10.9 11.3 19.8 16.3 - Latin America and Caribbean -11.8 -2.3 14.7 27.9 -2.9 5.7 10.1 10.9 14.8 12.3 17.4 9.7 11.5 12.5 10.6 11.4 10.4 16.5 Middle East and North Africa -27.1 - - - - - - - - - - - - - - - - - South Asia -4.0 0.7 31.8 10.7 -8.7 20.8 1.5 2.2 3.1 0.0 11.2 6.6 -1.6 -3.1 12.2 10.4 15.3 - Sub-Saharan Africa -26.9 -14.7 29.1 45.8 -14.6 - 1.0 3.4 22.6 25.8 19.6 8.7 14.0 13.1 - - - - Imports, Nominal, US$, sa World -6.9 -5.2 23.9 21.8 16.0 -2.8 3.6 -1.6 11.5 5.4 10.3 -6.2 25.4 7.2 21.2 16.1 5.6 - Advanced Economies -12.7 -3.2 2.6 21.1 2.4 13.8 2.6 1.4 9.6 3.4 9.2 1.9 10.3 5.0 10.7 9.4 9.1 - Emerging Market and Developing Economies -3.3 -6.3 38.9 22.1 24.6 -11.2 4.1 -3.3 12.6 6.6 11.0 -10.4 34.6 8.5 27.7 20.4 3.6 21.5 Commodity-exporting EMDE -1.0 -7.1 44.6 17.4 34.2 -16.3 3.8 -5.5 11.9 2.1 8.8 -15.4 39.7 7.3 31.5 22.4 -0.6 - Other EMDE -11.4 -3.1 21.4 39.4 -3.1 8.7 5.4 4.3 14.9 22.8 18.8 11.1 17.5 12.6 15.4 14.1 17.2 15.9 East Asia and Pacific -13.1 -3.6 22.7 49.9 -11.2 11.2 5.9 5.7 17.0 33.7 20.5 12.5 17.9 13.5 15.7 13.9 18.8 17.8 Europe and Central Asia -20.8 -1.2 11.6 42.7 12.9 16.2 6.1 8.4 20.9 10.0 14.4 7.6 22.9 13.6 26.4 16.6 18.3 - Latin America and Caribbean -9.9 -7.4 4.8 26.1 -9.0 9.3 1.4 3.6 11.0 5.1 13.3 -1.3 12.3 6.1 7.3 9.1 4.8 15.6 Middle East and North Africa 1.4 - - - - - - - - - - - - - - - - - South Asia -13.2 -5.4 58.0 33.2 13.0 -16.3 12.0 2.8 14.8 21.6 40.5 42.1 31.1 13.6 19.1 19.7 17.6 9.4 Sub-Saharan Africa -7.7 -13.9 -7.7 - - - -9.2 -12.2 - - - - - - - - - - 1 International Reserves, US$ World -5.7 -2.0 -2.7 1.7 2.1 1.7 -1.4 -0.5 0.7 0.3 0.7 0.8 0.9 0.4 0.8 0.5 0.3 0.0 Advanced Economies 2.2 3.2 -1.1 3.5 2.9 1.7 -0.8 0.0 1.6 0.4 1.4 1.2 1.1 0.5 0.9 0.5 0.2 -0.3 Emerging Market and Developing Economies -10.7 -5.3 -3.7 0.5 1.5 1.7 -1.8 -0.8 0.1 0.3 0.2 0.4 0.7 0.4 0.7 0.6 0.4 0.2 Commodity-exporting EMDE -11.1 -4.5 -2.5 0.5 0.5 0.8 -1.2 0.0 0.0 0.3 0.1 0.1 0.2 0.2 0.3 0.2 0.1 - Other EMDE -10.3 -5.7 -4.3 0.5 2.0 2.2 -2.0 -1.2 0.1 0.3 0.2 0.5 0.9 0.6 0.9 0.8 0.5 0.1 East Asia and Pacific -12.4 -7.3 -4.7 0.5 1.7 2.1 -2.3 -1.2 0.0 0.4 0.1 0.8 0.8 0.1 1.0 0.6 0.5 0.0 Europe and Central Asia -6.8 3.4 -4.2 2.9 3.2 3.1 -1.8 -1.6 1.9 0.6 0.3 -0.2 1.3 2.0 1.1 1.6 0.3 0.2 Latin America and Caribbean -5.3 1.4 -1.0 0.5 1.7 1.0 -0.6 0.2 0.6 0.2 -0.3 0.8 0.2 0.8 0.6 0.3 -0.1 -0.1 Middle East and North Africa -17.7 -10.7 -2.4 -2.0 -1.8 - -1.0 0.2 -1.6 -0.6 0.2 -1.2 -0.3 -0.3 -1.0 -0.2 - - South Asia 10.9 3.6 -3.0 2.1 4.5 2.4 -1.6 -0.3 0.5 0.5 1.0 0.7 2.0 1.7 1.1 1.2 0.2 -0.1 Sub-Saharan Africa -12.7 -4.7 3.7 3.2 0.8 - 0.7 3.8 1.3 2.4 -0.5 3.5 -1.2 -1.6 2.3 -1.8 - - Sources: World Bank, Haver Analytics, and IMF International Financial Statistics. 1 Total reserves excluding gold are used as proxies when total reserves data are unavailable. Produced by DECPG. Number 370 | December 8, 2017 Financial Markets 2016 2017 2016 2017 MRV 1 2015 2016 Q4 Q1 Q2 Q3 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Interest rates and LIBOR (percent) U.S. Fed Funds Effective 0.13 0.40 0.45 0.70 0.95 1.15 0.55 0.66 0.66 0.79 0.91 0.90 1.04 1.15 1.15 1.16 1.16 1.15 1.16 ECB repo 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 US$ LIBOR 3-months 0.32 0.74 0.92 1.07 1.20 1.32 0.98 1.03 1.04 1.13 1.16 1.19 1.26 1.31 1.31 1.32 1.36 1.43 1.51 EURIBOR 3-months -0.02 -0.26 -0.31 -0.33 -0.33 -0.33 -0.32 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 -0.33 - -0.33 US 10-yr Treasury yield 2.12 1.84 2.12 2.44 2.25 2.24 2.50 2.44 2.42 2.47 2.29 2.29 2.18 2.32 2.21 2.19 2.35 - 2.34 German Bund, 10 yr 0.54 0.14 0.18 0.35 0.30 0.46 0.30 0.34 0.32 0.39 0.25 0.36 0.28 0.55 0.42 0.41 0.42 - 0.38 Spreads (basis points) JP Morgan Emerging Markets 415 410 369 340 325 322 370 354 338 329 331 320 325 327 325 314 306 320 315 Asia 224 221 197 175 169 161 198 185 173 166 173 167 166 163 163 157 148 153 154 Europe 348 302 283 261 242 234 282 272 258 253 250 237 240 243 234 224 226 244 233 Latin America & Caribbean 540 537 475 445 427 428 481 463 442 431 431 420 430 435 435 416 407 422 420 Middle East 456 517 467 396 362 383 438 416 396 377 350 353 382 382 382 384 381 421 401 Africa 415 518 436 389 386 380 422 401 387 380 400 376 383 394 378 367 360 359 341 Stock Indices (end of period) Global (MSCI) 399 424 424 449 465 487 424 433 445 449 455 464 465 478 478 487 497 505 502 Advanced Economies ($ Index) 1663 1761 1761 1854 1916 2001 1761 1792 1839 1854 1878 1912 1916 1961 1960 2001 2037 2077 2064 United States (S&P 500) 2044 2258 2258 2363 2423 2519 2258 2279 2364 2363 2384 2421 2423 2470 2472 2519 2575 2648 2630 Europe (S&P Euro 350) 1474 1475 1475 1547 1534 1571 1475 1463 1501 1547 1564 1576 1534 1526 1512 1571 1600 1563 1565 Japan (Nikkei 225) 18817 19302 19302 18909 20033 20356 19302 19035 19342 18909 19197 19836 20033 19974 19720 20356 22198 22730 22485 Emerging Market and Developing Economies (MSCI) 794 861 861 958 1011 1082 861 909 936 958 978 1005 1011 1066 1088 1082 1119 1121 1118 EM Asia 404 419 419 474 512 543 419 443 459 474 484 505 512 538 544 543 571 572 569 EM Europe 244 295 295 301 304 331 295 302 296 301 313 308 304 315 336 331 330 330 331 EM Europe & Middle East 211 248 248 252 251 268 248 253 249 252 259 255 251 261 274 268 268 265 267 EM Latin America & Caribbean 1830 2341 2341 2611 2544 2917 2341 2516 2600 2611 2601 2532 2544 2752 2873 2917 2809 2719 2743 Exchange Rates (LCU / USD) Advanced Economies Euro Area 0.90 0.90 0.93 0.94 0.91 0.85 0.95 0.94 0.94 0.94 0.93 0.91 0.89 0.87 0.85 0.84 0.85 0.85 0.84 Japan 121.00 108.80 109.63 113.63 111.10 110.96 116.28 115.03 112.96 112.91 110.02 112.36 110.91 112.31 109.78 110.80 112.93 112.81 112.17 Emerging and Developing Economies Brazil 3.33 3.49 3.28 3.14 3.21 3.16 3.35 3.20 3.10 3.13 3.14 3.20 3.30 3.20 3.15 3.13 3.19 3.26 3.26 China 6.29 6.65 6.84 6.89 6.86 6.67 6.92 6.89 6.87 6.90 6.89 6.88 6.81 6.77 6.67 6.57 6.62 6.62 6.62 Egypt 7.70 10.12 14.71 17.82 18.10 17.77 18.56 18.68 17.01 17.76 18.09 18.10 18.11 17.92 17.75 17.65 17.64 17.68 17.69 India 64.14 67.19 67.39 66.97 64.48 64.29 67.86 68.06 67.01 65.83 64.52 64.46 64.45 64.44 63.97 64.46 65.07 64.85 64.46 Russia 61.34 67.06 62.95 58.67 57.17 58.93 62.03 59.76 58.42 57.83 56.53 56.88 58.10 59.72 59.42 57.66 57.76 58.97 58.90 South Africa 12.77 14.71 13.92 13.24 13.21 13.19 13.88 13.60 13.17 12.95 13.46 13.25 12.91 13.15 13.25 13.17 13.71 14.06 13.74 Memo: U.S. nominal effective rate (index) 114.7 119.7 122.5 123.4 120.7 116.6 124.9 124.8 123.0 122.5 121.6 121.0 119.4 117.9 116.4 115.4 117.4 117.6 116.9 Sources: World Bank, Bloomberg, and J.P. Morgan. 1 MRV = Most Recent Value. Commodity Prices 1 2016 2017 2016 2017 MRV 2015 2016 Q4 Q1 Q2 Q3 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov 2 Energy 65 55 64 68 64 65 68 69 69 65 67 64 60 62 65 68 71 76 76 2 Non-energy 82 80 83 86 82 84 84 85 87 85 83 83 82 83 84 85 86 86 86 2 Agriculture 89 89 90 91 88 87 89 91 91 89 88 89 87 88 86 87 87 87 87 2 Metals and minerals 68 64 71 78 74 81 75 76 79 79 75 73 72 76 83 84 84 84 82 Memo items: Crude oil, average ($/bbl) 51 43 49 53 50 50 53 54 54 51 52 50 46 48 50 53 55 60 61 Gold ($/toz) 1161 1249 1221 1219 1258 1278 1157 1192 1234 1231 1267 1246 1260 1237 1283 1314 1280 1282 1282 Baltic Dry Index 711 676 994 938 1023 1138 1031 913 760 1142 1229 979 861 906 1144 1363 1484 1455 1626 Sources: World Bank, World Bank Commodities Price Data (The Pink Sheet), and Bloomberg. 1 MRV = Most Recent Value. 2 Indexes, 2010 = 100. Produced by DECPG. Number 370 | December 8, 2017