A strong set of US economic figures ahead of the last Federal Reserve meeting of the year has helped give Wall Street and the UK market a lift.
The Dow Jones Industrial Average is up around 65 points, while the FTSE 100 has climbed 22.55 points to 5883.30, heading for a new closing high for the year. The impetus has been the release of US retail sales figures, showing a 0.8% increase in November, the fifth consecutive monthly rise and better than the expected 0.6% increase. Meanwhile producer prices also rose, suggesting the recovery in the US economy was gathering pace in the fourth quarter. Rob Carnell at ING Bank said:
It is too early for the Fed to make significant changes to their outlook in their statement tonight – especially as it is only a week since Bernanke went on TV to suggest that QE2 might become QE3 in due course. But that really does not look credible right now. A gentle acknowledgement that the economy is looking better is about all we can hope for.
But Benjamin Williamson, senior economist at Cebr, said:
Despite today's better-than-expected retail sales heading in to the holiday season, the world's largest economy still faces considerable problems in 2011. Inflation of only 1.2% reflects continued weak demand and unemployment remains stubbornly high at 9.8%. The [Fed] is likely to emphasise the need to continue with its programme of asset purchases in light of the ongoing inconsistent recovery.
