U.S. economic growth has slowed in 2019. However, the economy is still growing, and we believe it will continue growing through 2020. As we highlighted in our Outlook 2020: Bringing Markets Into Focus, we’re projecting real GDP growth of 1.75% in 2020, slightly below average for this economic expansion. 

The Year in Review

The U.S. economy has made it out of a volatile year relatively unscathed, based on data we’ve seen. Gross domestic product (GDP) grew an average of 2.4% in the first three quarters of 2019, higher than the 2.3% average quarterly growth in this 10-year economic expansion [Figure 2]. Output

The U.S. job market bounced back in November.

Nonfarm payrolls increased 266,000 last month, a 10-month high and well above consensus estimates for a 180,000 gain. September and October payrolls were also revised up by 41,000. Manufacturing payrolls climbed by 54,000 in November, but about 40,000 of that rise reflected workers returning from the General Motors strike.

Job creation has slowed somewhat this year as the economic expansion has matured. However, as shown in the LPL Chart of the Day, the pace of hiring is still noticeably above the expansion average, an impressive feat in the cycle’s 11th year.

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It has been a banner year for global equities, thanks to the S&P 500 Index’s 24.1% gain year to date. Developed market stocks have also climbed in 2019, but they haven’t shined as brightly as their U.S. counterparts—a consistent theme over the past several years.

Underperformance by international stocks has been persistent in this bull market. As shown in the LPL Research Chart of the Day, the MSCI EAFE Index of developed market stocks has underperformed the S&P 500 in 8 of the last 10 years, including 2019 to date.The impact over the entire period: a total return of 241% for the S&P 500 versus a 72%

It has been a rough start to the most wonderful month of them all, with the S&P 500 Index down each of the first two days of December. Don’t stop believing just yet, though.

Everyone knows December has usually been a good month for stocks, but what happened last year is still fresh in the minds of many investors. The S&P 500 fell 9.1% in December 2018 for the worst December since 1931. That sounds really bad, until you realize stocks fell 30% in September 1931, but we digress.

One major difference between now and last year is how well the global equities have been performing. Heading into December 2018,