10 Things You Need To Know: January 9, 2024
Key data releases this week include: consumer credit (Mon), NFIB Small Business Optimism (Tue), CPI (Thu), and PPI (Fri).
Haver
January 5, 2024
Nonfarm payrolls increased 216,000 (1.9% y/y) after rising 173,000 in November and 105,000 in October. During all of 2023, payrolls rose an average 225,000 per month after an average 399,000 in 2022. These gains compare favorably to the three years before the pandemic. The December increase was below expectations for a 150,000 gain in the Action Economics Forecast Survey.
Bloomberg
January 3, 2024
The FOMC minutes indicated increased optimism among participants about the path of inflation, noting “clear progress.” The committee expressed a willingness to cut the benchmark lending rate in 2024 should that trend continue, though they gave no indication easing could begin as soon as March, as futures traders expect.
Haver
January 5, 2024
The U.S. ISM Services PMI fell to 50.6 in December after rising to 52.7 in November, indicating expansion for the 12th consecutive month but at the slowest pace since May 2023. The December reading was up from a low of 49.2 in December 2022 but down from a peak of 67.6 in November 2021. The 12-month average was 52.8, reflecting strong growth in the U.S. services sector. The Action Economics Forecast Survey had expected 52.6 for December.
Capital Economics
January 8, 2024
The data published this morning are consistent with our view that euro-zone GDP is more likely to have contracted than expanded in the fourth quarter of 2023. They also suggest that while underlying price pressures have fallen a long way, the ECB’s job isn’t done yet.
Capital Economics
January 3, 2024
India’s manufacturing PMI survey for December suggests that activity lost some momentum at the end of 2023. Still, we think that growth in the sector is likely to hold up well in 2024 and that India will maintain its standing as one of the fastest-growing major EM economies.
Barron’s
January 8, 2024
The federal debt has hit $34 trillion, an increase of $1 trillion just since mid-September. The total is 120% of the size of the U.S. economy. That’s at a time of full employment and no declared war, circumstances that would suggest a balanced budget, or even a surplus, something last seen in the early 2000s, after the dot-com boom.
Barron’s
January 8, 2024
McKinsey & Company and others have come up with estimates for how much AI might boost productivity and economic growth over the long term. McKinsey believes AI could add between 0.1 and 0.6 percentage point to productivity growth each year, which would generate similar advances in economic growth rates. For Goldman Sachs, the growth effect could be as much as 1.5% with maximum adoption. But realistically, it’s more like an average of 0.4% over the next 10 years.
Bloomberg
January 5, 2024
Treasury Secretary Janet Yellen said the US economy appears to have achieved the so-called soft landing, with inflation coming down without major disruptions to the labor market. Wage increases are running over price increases now,” Yellen said. Meanwhile, International Monetary Fund Managing Director Kristalina Georgieva said that the US economy is “definitely” on track for a soft landing.
Reuters
January 4, 2024
Primary dealer banks have pushed back their predictions on when the Federal Reserve will end its quantitative tightening process to the fourth quarter. On that timeline, the Fed’s balance sheet would shrink from the current $7.764 trillion to $6.75 trillion.