The incoming news on activity has been unambiguously strong and, when taken together with the boost from the further fall in oil prices, has made us more confident that GDP will grow by at least 3% next year. The 1.3% m/m rise in manufacturing output and the 0.6% m/m gain in underlying retail sales in November built on the strong increases in October and suggest that a widespread pick-up in economic growth is underway. Moreover, faster job growth, the average monthly gain in payroll employment in the past six months is now 250,000, is a sure sign that the recovery has shifted into a higher gear.
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