Understanding the Economy Through LIFE
December 2024 Economic Update
As we wrap up 2024 and look toward the new year...
Current unemployment is at 4.2%
Inflation remains level at about 2.7%
The FED is continuing its lowering of short-term interest rates
Overall market liquidity remains negative
We’ll be looking for updated inflation numbers as we approach the end of the year
The Tale of Two of Economies
As evidenced by the Census Bureau Economic Indicators, the economy has been slowing for about 2 years. This has not translated to a lower stock market, at least not since late 2022. This includes 15 leading economic and coincident indicators.
The bright spot has been the stock market keeping economic leading indicators a bit better. Unfortunately, fifty-eight percent of the population has no exposure to equities. Leaving this segment well behind and the wealth gap continues to expand between the haves and have nots.
In fact, the lowest income folks have been left behind as inflation for that sector has been 6.3% over the last 12 months. The consumer price index for rent, utilities and food is much higher than the total basket which includes things like cars, clothes and electronics. Wage growth for this sector has been just above 4.5%. The Democrats are still wondering why they lost.
Stores like Kohl’s, Dollar Tree and Dollar General as well as Walmart are seeing softness in sales. McDonald’s $5 meal has been killing it and they plan to extend that deal well into December.
Let’s take a look at some things we track in addition to the above.
We use an acronym for tracking the economy we call LIFE. Here are the four:
Liquidity
Interest Rates