Economic Commentary – November 18, 2024

A dearth of important economic news combined with the growing gravitational pull of Thanksgiving and end-of-year holiday planning — Why isn’t Thanksgiving this week? Is it still 2024?— will continue to drive the economic debate into the fantasy-land speculation about policies not yet even partially formed, let alone detailed. Although President elect Trump’s comments about tariffs have dominated most early analyses, the threat of administrative actions that would fundamentally change the rules of the game for many industries and companies has suddenly emerged as a VIP (“Very Important Possibility”) item. Indeed, it is often overlooked that while regulations are widely despised, companies have made major investments over the years in managing their businesses based on existing regulations and government practices; removing those despised regulations can be extremely disruptive and costly in the short run. The uncertainty of the moment over what will really happen in 2025 is running understandably high, and this is likely to continue well into 2025. When businesses are unsure about material external impacts on their business model, the usual reaction is to slow down a bit as one does when driving in heavy fog. However, given that the US economy is growing robustly, such hesitation is potentially quite damaging to revenues. Suffice it to say, it is going to be a more interesting than usual end of the year, and there will be few illuminating answers to this conundrum this week or next.

Data to Watch:

1. US Housing Starts for October, released Tuesday, November 19
2. US Initial Jobless Claims for November 16, released Thursday, November 21
3. Michigan Consumer Confidence Survey for November, released Friday, November 22
4. Euro Area Inflation Rates for October, released Tuesday, November 19

Suggested Reading:

1. China Stimulus Boosts Domestic Consumption as Trump Tariffs Loom
2. Fed Chair Powell Says There's No Need to 'Hurry' to Cut Rates
3. These Baby-Chasing Grandparents Are Turbocharging Demographic Shifts

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