The incoming data shows that weekly same-store retail sales are strong, daily debit card spending data is strong, daily TSA air travel data is strong, the JOLTS layoff rate is very low, WARN notices are low, jobless claims are low, and announced job cuts are very low.
Combined with the latest Atlanta Fed GDP estimate at 3.0% and a boost coming to growth and inflation because of the Fed cutting interest rates since September and higher animal spirits since the election, the bottom line is that the US economy is entering 2025 with some really strong tailwinds, and the market is underestimating the risk that the Fed will have to hike interest rates later this year.
Our chart book with daily and weekly indicators for the US economy is available here.
Source: Challenger, Gray & Christmas, Haver Analytics, Apollo Chief EconomistNote: The Worker Adjustment and Retraining Notification (WARN) Act helps ensure 60 to 90 days advance notice in cases of qualified plant closings and mass layoffs. WARN factor is the Cleveland Fed estimate for WARN notices. Source: Department of Labor, Haver Analytics, Federal Reserve Bank of Cleveland, Apollo Chief EconomistSource: BLS, Haver Analytics, Apollo Chief EconomistSource: TSA, Bloomberg, Apollo Chief EconomistNote: Consists largely of debit card transactions. Source: Bloomberg, Apollo Chief Economist Source: Redbook, Haver Analytics, Apollo Chief EconomistNote: Some data not shown in chart due to significant variances in scale. Source: US Department of Labor, Apollo Chief EconomistNote: Some data not shown in chart due to significant variances in scale. Source: US Department of Labor, Apollo Chief EconomistSource: Federal Reserve Bank of Atlanta, Haver Analytics Apollo Chief EconomistNote: The following shocks are applied to Q4 2024: A 0.2%-point rise in inflation expectations, 7% appreciation in the exchange rate, 0.5 standard deviation fall in VIX, 30 bps tightening of credit spreads, -100 bps rate cuts and -50 bps forward guidance. Source: Bloomberg SHOK model, Apollo Chief EconomistNote: The following shocks are applied to Q4 2024: A 0.2%-point rise in inflation expectations, 7% appreciation in the exchange rate, 0.5 standard deviation fall in VIX, 30 bps tightening of credit spreads, -100 bps rate cuts and -50 bps forward guidance. Source: Bloomberg SHOK model, Apollo Chief Economist
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