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EnglishپارسیEnglishپارسیThe Atlanta Fed’s GDPNow model lowered its fourth-quarter U.S. growth estimate to 3.5%, down from 3.8% in the previous projection.
The revision reflects softer incoming data, particularly in consumer spending and inventory contributions, though the pace still indicates above-trend economic activity heading into year-end.
Market impact: Neutral; growth remains solid but the slower estimate may add to expectations of a gradual Fed policy shift.
The University of Michigan’s December survey showed a modest improvement in consumer sentiment, supported by easing inflation expectations.
Overall, the data paints a picture of cautious but improving consumer mood, helped by lower inflation expectations even as current conditions remain subdued.
Market impact: Mildly bullish for USD and U.S. equities; improved sentiment and lower inflation expectations support economic stability.
September’s U.S. personal income and inflation report showed stable disinflation alongside signs of softer consumer demand.
On the activity side:
The report reinforces a narrative of steady disinflation paired with cooling consumption, strengthening the case for potential Fed rate cuts if the trend persists.
Market impact: Mildly bearish for USD and U.S. yields; cooling demand supports a dovish shift.
The latest Federal Reserve data shows a mild reduction in liquidity indicators, reflecting continued balance-sheet runoff under quantitative tightening.
The Fed’s balance sheet edged down to $6.536 trillion, compared with $6.552 trillion the prior week.
Meanwhile, reserve balances with Federal Reserve Banks also declined to $2.878 trillion, from $2.898 trillion, signaling a modest tightening in bank reserves.
The data highlights the Fed’s ongoing effort to drain excess liquidity even as markets increasingly price in rate cuts for 2024.
Market impact: Mildly bullish for USD; lower reserves can tighten financial conditions at the margin.
Corporate layoff plans in the United States declined significantly in November, offering a softer signal on labour-market stress.
Challenger job cuts fell to 71.32K, less than half of the 153.07K reported previously.
On a yearly basis, job-cut announcements rose 23.5%, but this is a sharp moderation from the 175.3% surge seen earlier, indicating that the pace of layoffs is cooling.
The data suggests companies are scaling back on aggressive workforce reductions despite broader economic uncertainty.
Market impact: Bullish for USD and U.S. equities; easing layoff pressures support the narrative of a still-resilient labor market.
The latest U.S. unemployment claims data showed a stronger-than-expected labor market, with both initial and continuing claims improving notably.
Initial jobless claims dropped to 191K, well below expectations of 219K and down from 218K previously — one of the lowest readings in months.
Continuing claims also eased slightly to 1.939M, compared with 1.960M expected and 1.943M prior, indicating fewer workers are remaining on unemployment benefits.
The 4-week average fell to 214.75K, down from 224.25K, smoothing out weekly volatility and reinforcing the trend of labor-market resilience.
The data suggests employers remain reluctant to lay off workers despite signs of cooling economic momentum.
Market impact: Bullish for USD and U.S. equities; weaker claims dampen the case for aggressive Fed rate cuts.
Key components of U.S. durable goods orders showed steady momentum in September, reinforcing signs of stable underlying manufacturing demand.
Durable goods excluding defense rose 0.1%, matching the prior month’s pace.
Durables excluding transportation increased 0.6%, also unchanged from the previous reading, highlighting resilient demand in core capital-related categories.
The data suggests that while headline factory activity has cooled, core segments of manufacturing continue to hold firm.
Market impact: Mildly bullish for USD and equities; stable core orders support a steadier economic outlook.
U.S. factory activity showed mixed momentum in September.
Headline factory orders rose 0.2%, a sharp slowdown from the prior 1.3% increase, reflecting weaker demand in several durable-goods categories.
However, factory orders excluding transportation — a key gauge of underlying manufacturing health — also increased 0.2%, improving from –0.1% previously. The rebound suggests that core industrial demand held up better than the headline figure implies.
Market impact: Neutral; softer headline growth is offset by improved core orders, offering a balanced manufacturing outlook.
The Atlanta Fed’s GDPNow model revised its U.S. fourth-quarter growth estimate to 3.8%, down marginally from 3.9% in the prior reading.
The small adjustment reflects softer incoming data but still points to solid above-trend economic momentum heading into year-end.
Market impact: Neutral; growth remains robust enough to limit aggressive Fed rate-cut expectations.
Short-term U.S. government borrowing costs fell notably at Thursday’s auctions, reflecting strong demand amid rising expectations of Federal Reserve rate cuts.
The 4-week T-bill yield dropped to 3.680%, down from 3.905% previously.
The 8-week T-bill yield also declined to 3.620%, compared with 3.840% in the prior auction.
Lower short-term yields suggest investors are positioning for a softer policy path as U.S. economic data cools.
Market impact: Bullish for Treasuries; dovish implications weigh slightly on USD.
U.S. Treasury yields edged slightly lower on Friday, retracing part of the previous session’s rise.
The 2-year yield slipped 1 basis point to 3.5206%, after climbing 5 bps overnight.
Similarly, the 10-year yield dipped 1 bp to 4.098%, also easing after a 5-bp increase the night before.
The pullback reflects mild profit-taking and a steadier tone in bond markets as traders reassess rate-cut expectations ahead of next week’s key economic events.
Market impact: Neutral; modest declines indicate consolidation after earlier volatility.
Market participants have sharply increased expectations for Federal Reserve easing, with traders now pricing in roughly a 90% probability of a 25-basis-point rate cut at next week’s policy meeting. The renewed confidence reflects softer U.S. data, cooler inflation signals, and a growing belief that the Fed is preparing to shift toward more accommodative policy.
Market impact: Bearish for USD; rising rate-cut bets typically weaken the dollar and support risk assets.