Global Economy Briefing: December 23, 2025

Key Points

• US Q3 GDP was revised sharply higher to 4.3%, supported by strong consumer spending and corporate profits, though durable goods orders softened and consumer confidence eased.
• Europe showed resilient growth in Spain and improving external balances in Italy, while import prices in Germany rose modestly and car registrations were mixed.
• Inflation remains contained across Asia-Pacific, with Singapore and Japan reporting steady readings; Latin America posted softer Mexican price pressures and a trade surplus.

United States

Third-quarter GDP was revised up to 4.3% q/q annualized from 3.8%, exceeding consensus of 3.3%. Real consumer spending rose to 3.5%, corporate profits advanced 4.4%, and core PCE prices printed 2.9%.

However, October durable goods orders fell 2.2% m/m, though core capital goods orders edged up 0.2%. November industrial production rose 0.2% m/m, with capacity utilization steady near 76%.

Consumer confidence declined to 89.1 from 92.9, and the Richmond manufacturing index improved to −7. The Atlanta Fed GDPNow for Q4 eased to 3.0%.

Front-end funding conditions remained supportive, with the 52-week bill at 3.380% and 5-year note at 3.747%.

Signal: robust backward-looking growth momentum, but forward indicators suggest moderation.

Europe and UK

Car registrations presented a mixed picture: UK registrations rose 4.3% m/m but −1.6% y/y; Germany +0.2% m/m and +2.5% y/y; France −4.7% m/m and −0.3% y/y; Italy −1.4% m/m but flat y/y.

Germany’s import prices increased 0.5% m/m yet remained −1.9% y/y. Spain’s Q3 GDP held firm at 0.6% q/q and 2.8% y/y, though producer prices fell −2.5% y/y.

Italy’s non-EU trade balance improved markedly to €6.92B surplus from €5.32B. Switzerland’s ZEW expectations softened to 6.2.

Read-through: external positions strengthening amid subdued demand and persistent disinflation.

Asia-Pacific

Japan’s BoJ core CPI held steady at 2.2% y/y, while corporate services prices rose 2.7% y/y as expected.

Singapore’s headline CPI edged up 0.3% m/m to 1.2% y/y, with core inflation stable at 1.2% y/y.

South Korea’s consumer confidence eased to 109.9.

Net: regional price pressures remain anchored at low levels, supporting monetary policy flexibility.

Latin America

Mexico recorded a November trade surplus of $0.663B (exceeding consensus), though in USD terms a small deficit of −$0.274B.

First half-month core CPI cooled to 0.31% from consensus 0.39%, with headline at 0.17%.

Brazil’s mid-month CPI moderated slightly to 4.41% y/y from 4.50%, with monthly gains of 0.25%.

Canada

October GDP contracted −0.3% m/m as expected, but November rebounded 0.1% m/m. Fiscal deficit widened year-on-year.

What it means

Several themes emerged from the data flow. First, the substantial US GDP upgrade underscores resilient domestic demand and eases near-term recession risks, though softening orders and confidence warrant monitoring.

Second, Europe’s improving trade surpluses and contained import costs provide a buffer for exporters amid cautious consumer sentiment.

Third, low and stable inflation across Asia-Pacific and cooling price impulses in Mexico reinforce disinflationary trends globally.

Portfolio tilt: maintain exposure to quality US duration given orderly funding; selectively add to euro-area industrials benefiting from healthier external balances.

Retain overweight Mexico on trade momentum; monitor Brazil’s moderating inflation for further carry opportunities.

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