Weekly Talking Points for Financial Advisors (11/4/24)

Read the highlights of this week's commentary from Helios:

• Inflation-adjusted US GDP rose at a 2.8% annualized rate in the third quarter, driven by consumer spending and increased federal defense spending. Consumer spending rose 3.7%, its fastest pace since early 2023. Despite a strong Q3 GDP headline, growth remains uneven, driven largely by higher-income households. Since 2018, high earners have increased spending over twice as much as lower earners, showing demand growth isn’t benefiting all Americans equally.
• The Federal Reserve’s preferred inflation gauge, the core personal consumption expenditures (PCE) price index, which excludes food and energy prices, rose 0.3% in September and 2.7% year-over-year – the largest monthly gain since April. Headline inflation eased to 2.1%, its lowest since early 2021, supporting a slower pace of interest rate cuts after last month’s 50-basis-point rate cut.
• Hiring in the US grew at its slowest pace since 2020, with only 12,000 jobs added in October and downward revisions to previous reports. The unemployment rate ticked up slightly, from 4.05% to 4.14%, while hourly earnings remained steady. This softening labor market supports a likely 25-basis-point rate cut at the Federal Reserve’s Nov. 6-7 meeting.

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