Macro Conditions at a Glance

2024Q4 GDP estimate is now revised down to 2.4%. Core PCE is at 3.4% yoy and still above the Fed's 2% target. Long rates have been rising. There were no other significant data changes in December. Overall, the Goldilocks period carries on.

Lagging Indicators

The Unemployment Rate is now stabilizing at 4.0%.

The Sahm Rule indicator was triggered in July after crossing 0.53, but has since come down.

The number of job openings is now 7.4 mil, the lowest level since January 2021.

Real GDP Growth continues to be robust. Q2 GDP was revised up from 2.8% to 3.0%.

2024Q2: 3.0%
2024Q3: 3.1%

2024Q4: 2.4% (est.)

Core PCE has gone sideways in the past several months, and is 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 finally dis-inverted at 3m/10yr after two long years.

Initial Claims slightly declined. Continued Claims were flat.

Housing starts are trending downward.

Average Weekly Hours declined to a level lower than that of the pre-Covid era.

Retail Sales indicates that consumers are still-resilient.

University of Michigan Consumer Sentiment is at a relative low level.

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

Volatility picked up in 2024H2. Stocks pushed to new highs.

Investor Sentiment is neutral.

Fed Rate Path