Macro Conditions at a Glance

No macro data coming in during the month is alarming. The Goldilocks period carries on.

2025Q1 GDP estimate is expected to be 2.9%.
Core PCE is at 2.8% yoy and still above the Fed's 2% target.
Manufacturing PMI turned to expansion after two years, in a sign of economic resilience.

Lagging Indicators

The Unemployment Rate is now stabilizing at 4.0%.

The Sahm Rule indicator was triggered in July after crossing 0.5, but has since come down.

The number of job openings is now 7.6 mil, a low level since 2021.

Real GDP Growth continues to be robust.

2024Q3: 3.1%
2024Q4: 2.3%

2025Q1: 2.9% (est.)

Core PCE has gone sideways and is still meaningfully above the Fed's 2% target.

Service Inflation continues to come down gradually.

Corporate profit and margin rebounded, in a positive sign for stocks.

Leading Indicators

Term Spread - the yield curve has dis-inverted after two years.

Initial Claims slightly declined. Continued Claims were flat.

Housing starts jumped in December.

Average Weekly Hours stayed below the pre-Covid levels.

Retail Sales indicates that consumers are still-resilient.

University of Michigan Consumer Sentiment slightly improved.

The Manufacturing PMI continues to contract.
The Services PMI continues to expand, but declined a little from the previous month.

Volatility stayed low despite uncertainties.

Investor Sentiment is neutral.

Fed Rate Path