Global Economy Briefing: December 17, 2025

Key Points

• U.S. jobs cooled but stayed positive; wages eased; a big crude draw lowered near-term inflation risk.

• Europe held in services-led growth while factory PMIs stayed mixed; sentiment improved and inflation stayed low.

• Asia carried momentum: India’s PMIs ran hot; Japan flipped to a trade surplus on stronger orders and exports.

United States

The United States printed a cleaner soft-landing mix. November payrolls rose 64k after a one-off October dip. Unemployment ticked to 4.6%.

Average hourly earnings slowed to 0.1% m/m and 3.5% y/y. Hours nudged up. October retail quality firmed (control +0.8% m/m; core +0.4%), even with flat headline sales.

PMIs stayed in expansion (manufacturing 51.8; services 52.9). Redbook rose 6.2% y/y. API reported a large crude draw (−9.3M bbl).

Net: demand is steady; price pressure keeps easing.

Europe and UK

France’s manufacturing popped back above 50 (50.6), but services eased (50.2). Germany’s services stayed solid (52.6) while manufacturing slipped (47.7).

Euro-area composite was 51.9; services 52.6; manufacturing 49.2. ZEW expectations improved sharply for Germany (45.8) and the bloc (33.7), though German current conditions remained weak (−81).

Italy’s CPI was 1.1% y/y (−0.2% m/m). Trade showed a €4.16B surplus overall but a deficit versus the EU. The UK softened: jobless 5.1%; wages ex-bonus 4.6%; claimants +20.1k.

Read-through: the ECB and BoE can hold. Europe grows through services while factories repair slowly.

Asia-Pacific

India remained the global bright spot: manufacturing 55.7; services 59.1; composite 58.9. That supports regional demand without lifting global goods prices.

Japan improved at the margin. Core machinery orders jumped 7.0% m/m (12.5% y/y). Exports rose 6.1% y/y.

The trade balance turned to a ¥322.2B surplus. Flash PMIs still showed a two-speed economy (manufacturing 49.7; services 52.5).

Korea’s money growth stayed firm (M2 7.1% y/y), backing domestic demand.

Americas and Africa

Chile cut to 4.50%, keeping a cautious easing path. Argentina posted a primary surplus (ARS 2,128M) and 3.3% y/y growth. South Africa was on holiday.

Why this matters globally

Lower U.S. wage inflation and a crude draw reduce the odds of a renewed price spike. That eases dollar pressure and supports global risk.

Europe’s low inflation plus improving sentiment lowers recession risk and helps exporters with cheaper inputs.

Asia’s momentum—India’s demand and Japan’s orders—puts a floor under the 2026 goods cycle without stoking inflation.

What to do with it

Favor quality duration. Overweight service-led U.S. and India. Add selectively to European exporters with low cost bases.

Keep energy exposure balanced: inventories fell, but capacity looks adequate. Stay cautious on UK domestics until labor and housing stabilize.

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