The Davy Digest - 8th December 2025

Global equities rose modestly last week. In the US, the release of delayed economic data continued following the federal government’s reopening. September’s reading of the Fed’s preferred inflation measure –  the core personal consumption expenditures (PCE) index – was published, showing inflation at 2.8% year-on-year, lower than expected. Meanwhile, payroll processor ADP published its proprietary measure of US job growth, indicating a 31k reduction in employment during November – the largest decrease since March 2023.

Last week's highlights

	ADP Private Payrolls (03/12) – Decrease of 32k jobs in November, below expectations. September Core PCE (05/12) – Fell to 2.8% year-on-year, lower than expected
	Eurozone Inflation (02/12) – Increased to 2.2% year-on-year (vs 2.1% expected) HCOB Eurozone Composite PMI (03/12) – Increased to 52.8
	S&P Global Composite PMI (03/12) – Revised higher to 51.2
	China Caixin Services PMI (02/12) – Fell to 52.1, in line with consensus Brazil Q3 GDP (04/12) – Growth slowed to 0.1% quarter-on-quarter

In Europe, inflation accelerated to 2.2% year-on-year, ahead of expectations, while Purchasing Managers’ Index (PMI) surveys showed an increase in activity. In the United Kingdom, the composite PMI was also revised higher to 51.2, signalling a modest expansion there.

This week’s headline event will be Wednesday’s Federal Reserve meeting, where Chair Jerome Powell is expected to deliver a rate cut despite limited recent labour and inflation data. Industrial Production figures will be published in the United Kingdom and Germany on Thursday. Further afield, the Central Bank of Brazil will be convening, with a dovish hold expected.

What's on the radar

	October Job Opening and Labour Turnover Survey (09/12) Federal Reserve Meeting (10/12)
	Germany October Industrial Production (08/12)
	Industrial Production (12/12)
	China Inflation (10/12) Central Bank of Brazil Meeting (10/12) Japan Industrial Production (12/12)

Chart of the moment - K-nundrum

Source: Bloomberg, December 5th 2025. GDP = Gross Domestic Product. GDP Nowcast uses Atlanta Fed GDPNow estimate of quarter-on-quarter annualised real growth

• Since Liberation Day, a “K-shaped” economy has emerged in the US, characterised by a growing divergence between the pace of economic growth and labour market expansion.
• US Gross Domestic Product is expected to have expanded by 3.8% in the most recent quarter, buoyed by record investment in artificial intelligence and a tariff-led reduction in the trade deficit.
• In contrast, labour demand has slowed noticeably, unable to recover from the Liberation Day policy shock. The 3-month average of private employment produced by payroll processor ADP has recently moved into negative territory, indicating a shrinking number of jobs in the US.
• The unusual combination of above-trend growth, stable inflation, and a weakening labour market will continue to complicate the monetary policy outlook for the Federal Reserve moving into 2026.

If you would like to stay up to date on the latest macro information, subscribe to this newsletter to receive it straight to your inbox every Monday.