The Current Landscape of the US Economy
The US economy is currently navigating a series of significant developments that could shape its trajectory in the coming months. Here are some of the most impactful trends:
Child Tax Credit Expansion
Despite receiving support from both sides of the aisle, the expansion of the child tax credit faces an uncertain future. The proposed compromise aims to lift half a million children out of poverty. Democratic Senator Ron Wyden is optimistic about passing the bill by the end of the month, but Speaker Mike Johnson is encountering resistance from some of his Republican colleagues.
Dip in Rents Could Affect Inflation
Morgan Stanley’s recent analysis reveals a 4.7% year-over-year decline in rents for the fourth quarter, marking the first drop in this index since 2010. This decrease in rental prices is anticipated to signal a broader reduction in inflation rates.
Tech Layoffs Not Spreading to Other Industries
The technology sector is experiencing significant job cuts, with 146 companies laying off 24,365 employees this year. However, these layoffs appear to be contained within the tech industry, with other sectors remaining relatively stable. The shift in resources towards generative AI may be driving these changes.
Manufacturing and Services PMI Surge Ahead
The S&P 500 flash Purchasing Managers’ Index (PMI) for January has shown better-than-expected results for both manufacturing and services. The services sector PMI reached 52.9, its highest in seven months, while the manufacturing PMI rose to 50.3, marking its first increase in nine months.
Finance
