Two the Point — Consumer Pulse: Deciphering the Heartbeat of the U.S. Economy

As we look at the resilience of the U.S. consumer in the face of economic challenges, this week’s insights reveal key trends that are impacting the economy and investment strategies:

  • Consumer Price Index for last December: Higher than expected, suggesting possible inflation concerns.
  • Shelter Index Contribution: Significant increase of 6.2% year-over-year, driving up CPI.
  • Real-Time Data Perspective: Zillow Observed Rent Index decreases, indicating a slower pace in housing cost increases.
  • Core CPI Excluding Shelter: Only a 2.2% increase year-over-year, aligning with the Fed’s inflation target.
  • U.S. Consumer Strength: Retail sales were up by 0.6% in December, suggesting robust consumer spending.
  • Fed’s Monetary Policy Outlook: Potential shift towards a more balanced approach, moving away from restrictive policies.
  • Economic Implications: Strong consumer spending hints at a stable economic landing in 2024.

 

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