US Macroeconomic Report - October 2024
In October, U.S. Real GDP grew at 2.7% year-over-year, marking a slowdown of -0.38% from the previous quarter and -0.58% from the same period last year. While U.S. economic growth remains solid, it is decelerating, leading to a corresponding moderation in inflation. Inflation fell to 2.4% this month, down by 0.18% from the prior month and by 1.29% from a year earlier.
The labour market remained robust, with unemployment at 4.1%, -0.1% lower than the previous month but 0.3% higher than a year ago. This indicates a gradual mean reversion toward historical unemployment levels as economic growth slows.
In response to the strong labour data, both short-term (2-year) and long-term (10-year) U.S. Treasury yields have risen this month 0.39% and 0.35%, respectively. This suggests that markets are anticipating a potentially more hawkish stance from the Federal Reserve amid concerns over a tight labour market possibly reawakening inflation. However, compared to a year ago, these yields remain lower, with declines of -0.75% and -1.08% for the 2-year and 10-year Treasuries, respectively, reflecting a softer U.S. economic outlook.
Economic Cycle Analysis:
This month, our U.S. economic cycle composite indicator declined, indicating conditions characteristic of an economic cycle peak deceleration. Currently, 43% of our indicators signal a cycle top, 0% signal a cycle bottom, and 57% remain neutral. Month-over-month, non-financial corporations indicator rose the most, up by 0.87%, while price pressures saw the largest decline, down by -2.81%. Year-over-year, sentiment recorded the strongest improvement, up by 10.09%, while the labour market showed the greatest deterioration, down by -5.39%.
The box plot above illustrates the current status of our indicators relative to historical ranges. Price pressures (inflation) and the labour market continue to reflect peak cycle conditions, both sitting above the 75th percentile. Additionally, all other indicators are above their historical mean, highlighting an overall environment consistent with decelerating peak cycle economic conditions.
Read the Full Report:
The full report is available for download at the bottom of this page. Inside, you’ll find a comprehensive breakdown of each component contributing to our macroeconomic indicators, providing detailed insights into the factors driving current economic conditions.