Bruce Katz, CLU ®, CSSCS’ Post

As we move into the first quarter, the US economy appears to be on firmer footing. Here are some key takeaways from the latest report: ◼️ GDP growth for the fourth quarter was revised slightly downwards, but its composition was stronger than initially thought, suggesting a positive near-term outlook. ◼️ Despite warnings of a recession, the economy has remained resilient, largely due to a tight labor market that is supporting consumer spending. ◼️ Inflation was revised slightly upwards, but the pace of increase was milder compared to earlier in the year. ◼️ The Federal Reserve has raised its policy rate by 525 basis points since March 2022, which could impact your investment decisions. While the US economy continues to lead the world, uncertainties persist. As a financial professional, I'm here to help navigate these economic shifts. Remember, a well-informed investor is a successful investor! #EconomyUpdate #InvestmentStrategy #FinancialPlanning 🌐💼 Source: https://lnkd.in/gMbrc-9K

The US economy is growing, outshining previous estimates for Q4. With a robust 3.4% growth, thanks to consumer spending and business investments, fears of a recession are taking the backseat.   Profits are soaring, especially among non-financial corporations, hinting at a steady path of expansion. And with the Fed's signal of potential rate cuts by June, things are looking up. #USEconomy #EconomyGrowth

The U.S. economy outperformed expectations in the second quarter, with robust consumer spending and business investment fueling growth, while inflation pressures eased, maintaining the outlook for a possible interest rate cut by the Federal Reserve in September. The Commerce Department's advance report on second-quarter GDP revealed a 2.8% annualized growth rate, double the 1.4% pace in the first quarter and surpassing economists' forecasts. The GDP growth was bolstered by inventory building and increased government spending, although the housing market's recovery regressed slightly, acting as a small drag on the economy. The trade deficit widened, subtracting from GDP growth. Despite these mixed signals, the report alleviated fears of an imminent end to the economic expansion, which had been fueled by a resilient labor market and consumer spending. Consumer spending, which comprises more than two-thirds of the economy, increased at a 2.3% rate, driven by higher outlays on services and goods, including new light trucks and recreational products. Business investment surged, with equipment spending rising at an 11.6% rate, and inventory accumulation contributing significantly to GDP growth. The solid GDP figures come amid steady easing in the labor market, as initial claims for state unemployment benefits fell. This robust economic activity underpins expectations for a pickup in productivity, potentially slowing labor cost increases and price pressures. The personal consumption expenditures (PCE) price index, excluding volatile components, rose at a 2.9% rate, suggesting a moderation in inflation. Despite the positive economic signals, the outlook for the latter half of the year remains uncertain. The labor market is expected to slow, impacting wage gains, and disposable income growth has already decelerated. The saving rate fell to 3.5%, indicating consumers are saving less to support their spending. Furthermore, state and local government revenues are slowing, potentially curbing spending. Economists predict that much of the Federal Reserve's rate hikes are still to be felt, with monetary policy easing anticipated later this year. Concerns about potential new tariffs, especially if former President Donald Trump returns to the White House, could also influence business decisions. #USEconomy #GDPGrowth #ConsumerSpending #BusinessInvestment #FederalReserve #InterestRates #Inflation #EconomicOutlook #LaborMarket #MonetaryPolicy https://lnkd.in/dZamz-gE

I found an insightful article in Financial Times on how the US economy is holding strong as the presidential election approaches. My top takeaways: ⭐ US GDP grew by 2.8% in Q3, just below expectations, showcasing consumer strength despite inflation. ⭐⭐ Consumer spending accelerated to 3.7%, while private-sector job growth added 233,000 roles in October, signalling continued economic stability. ⭐⭐⭐ Economists are hopeful for a “soft landing,” with the Fed’s recent rate cuts and a healthy job market helping ease inflation without major job losses. This article explores how the US economy is surpassing other major economies, driven by consumer confidence and a resilient job market. Definitely worth a read!

The U.S. economy expanded at a solid rate of 2.8% in the last quarter, primarily fueled by strong consumer spending. However, as inflation continues to moderate, the Federal Reserve has started cutting interest rates, signaling more good news for consumers and businesses. Read more: #USEconomy #ConsumerSpending

The U.S. economy surged ahead in the third quarter, posting a solid 2.8% growth rate as consumer spending soared to its fastest pace in 1.5 years, buoyed by easing inflation and robust wage gains. This resilient performance comes just days before the Nov. 5 presidential election, with economic health at the forefront of voters’ minds as they decide between Vice President Kamala Harris and former President Donald Trump. Despite fears of a recession, the economy has outpaced global peers, navigating a landscape of high food and housing costs and overcoming the Federal Reserve’s aggressive interest rate hikes in 2022 and 2023. Consumer spending, which represents more than two-thirds of U.S. economic activity, grew at a 3.7% rate, its best performance since early 2023, driven by increased outlays on goods and services like prescription medication, motor vehicles, and hospitality. Meanwhile, business investment in equipment also surged, particularly in the aircraft sector, signaling strong corporate confidence. While inflation has cooled, offering relief to households, particularly those with lower incomes, economists see potential challenges ahead. The GDP report reveals that inflation is nearing the Fed’s 2% target, allowing for a series of rate cuts, starting with an aggressive half-point reduction last month. However, a widening trade deficit and slowing inventory accumulation slightly tempered the overall GDP growth. The economic resilience may influence the Federal Reserve’s future rate-cutting decisions, potentially slowing the pace of easing if strong domestic demand continues. With hurricanes and industrial strikes expected to dampen fourth-quarter growth, and the election outcome poised to shape 2025 policy, all eyes remain on how these factors will steer the U.S. economy in the coming months. #USGDP #EconomicGrowth #ConsumerSpending #Inflation #FederalReserve #PresidentialElection2024 #BusinessInvestment #EconomicOutlook #InterestRates #JobMarket https://lnkd.in/druaX_8N

“Growth last quarter also received a boost from inventory building as well as increased government spending, the Commerce Department's advance report on second-quarter gross domestic product on Thursday showed. The housing market recovery, however, regressed and was a small drag on the economy. The trade deficit widened further, subtracting from GDP growth…” The FOMC is at a pivot point in crafting its monetary policies leading into 2025. Counterintuitive , conflicting indicators have emerged likely creating a more complex policy making process. Then add in those “slow moving, deeper” economic forces that Chairman Powell alludes to but never fully defines (implying a inquiry of understanding is in progress). With the increase of tariffs emerging in the geopolitical economic space, interest rates must ease downward in corresponding fashion to prevent a currently disinflationary monetary policy from accelerating into a future deflationary trend. However, an emerging growth pattern eventually will likely reverse or stymie the efforts of the FOMC to reduce inflation to acceptable levels. It is important to note that M2 (in June) did edge upward $116.3 billion (.5%) confirming validity of economic growth assertions (for June). However, M2 did contract $4 billion for Q2 2024, and $134.4 billion H1 2024 (not seasonally adjusted closing balance used). The growth or decline of economic performance is tied to the corresponding expansion or contraction of monetary supply. The ytd contraction of $18 billion in M2 does indicate a relationship between a slowing of monetary growth and easement of absolute prices. While this may be inferred as a monetarist approach, the assertion that “buying power” is proportional to expansion or contraction of monetary supply is quite elementary in scope. The dilution of the value of labor is also proportional to expansion of monetary supply in relation to overall GDP (the inverse also holds true). By all indicators, the FOMC has walked the “tightrope” well in attempting to create and maintain a disinflationary trend without creating an economic contraction. But it is at a crossroads that the next 3 to 5 years of economic performance is at stake. Unfortunately, its “lane” and prerequisite tools are limited to keep issues well outside its control and scope in balance. All this “mumbo jumbo” is stated to prompt the question: “are we out of the ‘woods’ yet?” I think the answer is no. Until larger systemic issues are addressed positively by policy makers, the future is in the hands of a technocratic apparatus with effectively only one policy tool and the scope, scale that comes with a limited mandate.

Economists are noting a shift in consumer sentiment as inflation cools and the Federal Reserve prepares to lower interest rates. This change, dubbed the end of the "vibecession," suggests that Americans' outlook on the economy is improving, aligning better with actual economic performance. Consumer spending remains resilient, and fears of a recession have subsided, with experts increasingly optimistic about achieving a "soft landing" – slower growth paired with lower inflation. While some still warn of a potential downturn, the chances of a recession in the near term appear to be fading. #Economy #Inflation #Fed #SoftLanding

As we move into 2025, the U.S. economy remains resilient, with moderating inflation, steady consumer spending, and a strong labor market. Despite some uncertainty, we’re optimistic about continued growth. The Federal Reserve’s recent rate cuts signal a shift, but balancing inflation control with economic growth will be key. Consumer resilience, supported by real income growth, will keep purchasing power strong, while labor markets remain stable. Corporate earnings, especially in AI and onshoring, offer exciting opportunities, even amid higher interest rates. With careful navigation of policy uncertainties, we can expect 2025 to be a year of growth, innovation, and success. #ConsumerBehavior #Economy #Growth #LaborMarket #MastercardEmployee

Where do we stand at this moment with the U.S. economy, after looking at the latest economic data? These reports have indicated that the U.S. economy has reached a kind of sweet spot (at least for now). That’s seen from falling unemployment claims, moderating inflation, and robust economic growth. Part of the mix is rising consumer spending and wage growth including as adjusted for inflation on both counts. Oh and the Fed announcement due next Thursday: The ongoing mix of economic data gives the Federal Reserve room to lower interest rates at a modest pace without a sense of urgency, mindful of its dual mandate of stable prices and maximum employment. That translates to a likely reduction of one-quarter of 1%, after the half-point cut in September. Among the latest data points, personal spending was up 0.5% in September, bolstered by a rise of 0.3% in personal incomes. The savings rate ticked down to 4.6%. For one view of inflation, the Personal Consumption Expenditures Price (PCE) Index (headline) is up 2.1% year over year, while the core rate is up 2.7%. Looking at the headline rates on both a three and six-month basis, they are up less than 2%, while the core is up 2.3%.   Jobless claims: New claims for unemployment benefits fell by 12k to 216k, the lowest since May. The earlier surge associated with Hurricanes Helene and Milton has dissipated. Many Americans remain irritated, and their financial goals undermined, by the lingering impacts of historically high inflation. The issue is slowly being addressed by moderating prices and wage growth outpacing the inflation rate.