Consumers spent less on clothing and electronics in recent months, while spending the same or more on groceries and other essentials, The Wall Street Journal reported.
Category: TRENDS ON THE U.S. ECONOMIC FRONT – Jan 17 2023
TOP 2015 TREND, THE DRIVERLESS CLIFF: CAR MAKERS’ NEW MANTRA = “SEXY REALISM”
At this month’s annual Consumer Electronics Show, self-driving cars and other blue-sky projects were largely absent from the space devoted to new vehicle tech.
U.S. INDEPENDENT RESTAURANTS SUCCUMBING TO INFLATION
In December, more than half of U.S. restaurants had trouble paying their rent, according to data service Alignable, compared to less than a third a year earlier.
FEDERAL BUDGET CHASM WIDENED IN DECEMBER
The U.S. government ran $85 billion worth of red ink last month, the treasury department reported. A year earlier, the deficit was $21 billion.
BIG BANKS EXPECT A RECESSION
Analysts at the four biggest U.S. banks expect rising interest rates to drive the American economy into a recession this year, according to The Wall Street Journal.
INFLATION CONTINUED TO SLOW IN DECEMBER
In December, the rate of U.S. inflation slowed to 6.5 percent from November’s 7.1 percent, marking the Consumer Price Index’s (CPI) sixth consecutive month of decline after peaking last June.
WILL THE FED CUT RATES THIS YEAR?
Equity markets bounced last week, partly on news that inflation continues to slow. That is persuading a growing number of money managers that the U.S. Federal Reserve will begin cutting interest rates this year.
GUESSING GAME: FED TO RAISE RATES ONLY 25 BASIS POINTS NEXT MONTH
As we note in the ECONOMIC UPDATE section of this week’s Trends Journal, the bet on The Streets is that the U.S. Federal Reserve will raise interest rates only a quarter of a percent on 1 February. Slower growth in consumer prices and wages has made it almost certain that the U.S. Federal Reserve will raise its key interest rate by only a quarter point next month, after raising it three-quarters of a point four times last year and by a half point twice, according to the Financial Times.
BONDS ARE BACK
After tanking last year, bonds are poised to record their best January performance since 1991 as investors see inflation declining across the world’s leading economies, the Financial Times reported.
ECONOMIC UPDATE – MARKET OVERVIEW
All economic eyes this week are on Davos, and according to The Wall Street Journal, the “Mood is Somber as Many CEOs Question Economy’s Future.”