Employment and Consumer Sentiment

Employment and Consumer Sentiment

Despite initial concerns that higher interest rates would lead to economic slowdown and layoffs, the job market has remained strong, with unemployment rates near a 50-year low.?

This resilience in the labor market, coupled with continued consumer spending, suggests that the Fed might be achieving the ‘soft landing’ it has been aiming for.

The recent uplift in consumer sentiment, as reflected in the University of Michigan’s consumer sentiment index, further supports this outlook.

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Caution Amid Optimism

Economist Dan North from Allianz Trade Americas projects a year of slower growth in 2024, although he stops short of predicting a recession.?

The economy’s future course will largely hinge on continued job stability and consumer spending patterns.

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Economic Stimuli and Future Outlook

Contributing to the fourth quarter’s growth was the substantial student debt cancellation by the Biden administration, boosting consumption.?

In conclusion,? the US economy ended 2023 on a high note and the path forward in 2024 is cautiously optimistic.?

Family offices and accredited investors should closely monitor key economic indicators, particularly regarding policy changes, consumer behavior, and employment trends, to successfully navigate the ongoing changes in the economic landscape.

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Growth Against the Odds

The US economy demonstrated remarkable resilience in the final quarter of 2023, surpassing many forecasts.?

The Gross Domestic Product (GDP) grew at an impressive annualized rate of 3.3% in Q4, though down from 4.9% in the previous quarter, it was well above the anticipated 2%.?

This growth rate is in line with pre-pandemic levels, highlighting the economy’s strength during this period.

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Key Drivers of Growth

This unexpected upswing was fueled by good levels of consumer spending and significant government outlays.?

The economy’s endurance is particularly significant given the Federal Reserve’s efforts to temper economic activity and bring down inflation.?

Inflation has dropped from a peak of 9% in mid-2022 to 3.4%, highlighting the effectiveness of the Fed’s measures.