American economic resilience remains intact
A slew of economic data continues to indicate that the US economy remains in an expansionary mode. Industrial production, housing starts, and retail sales all improved. Continuing jobless claims fell, signalling the ongoing resilience of the labour market. The Atlanta Fed’s GDPNow is at a strong 3% for Q4 2024.
Earnings update: Financials are strong
US banks reported bumper results for Q4. The level of optimism is also high. This raises the odds of a sustainable economic expansion as credit flows through the economy.
Small businesses are more confident
The NFIB index rose again. The turnaround in confidence is not a knee jerk reaction to a Trump win. It appears that small business owners expect positive change from the new administration, helping to boost business. Hiring and spending plans are likely to improve.
Inflation concerns ease
A slight improvement is enough to send sentimental higher. While core CPI beat estimates, CPI came in line with expectations. The Cleveland Fed’s Inflation Nowcasting continues to show low risk of inflation accelerating for Jan 2025.
