Data-driven insights and analysis from our investment team every week.
One of the ideas that we have incorporated into our outlook is that there will be a slowing level of growth in the US economy in 2024. This would happen because some of the drivers behind the stronger-than-expected growth (larger than expected fiscal deficit, consumer dis-saving) would go into reverse as we travelled through 2024. But some statistics are challenging this idea.
Our Chart of the week shows the number of jobs created in the US on a monthly basis. The blue line shows the monthly figure, which can be volatile. The grey line is the three-month average which gives a better sense of the trend. As you can see, there was an explosion in job creation after the reopening of the economy in 2021 and a significant slowdown in job creation since the first quarter of 2022. However, this seems to have ended in the fourth quarter of 2023. Since then, there has been a steady and consistent improvement in the labour market. Job creation is an important contributor to consumption growth, people without jobs are getting them and people with jobs are feeling more secure in them. This is only one factor behind economic growth, but it is suggesting not to expect much of a slowdown in the US.
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