Read the highlights of this week’s commentary from Helios:
- December’s jobs report exceeded expectations with significant employment gains and a drop in the unemployment rate to 4.09%, indicating a potential stabilization of the job market. Jobs grew by 256,000, with retail showing strong growth and manufacturing declining. This robust performance is likely to lead the Federal Reserve to maintain current interest rates at the January meeting.
- The preliminary January consumer sentiment index dipped to 73.2 amid fears of rising inflation and deepening political divisions on economic outlooks. Inflation expectations hit a post-pandemic high of 3.3%, spurred by tariff concerns that also led consumers to accelerate purchases. Economic anxiety was evident, with more consumers bracing for higher unemployment and lower income growth.
- In December, the ISM Services index rose to 54.1 from 52.1, reflecting increased activity due to anticipated tariffs from the incoming administration. Strong demand was signaled by rising new orders and business activity, though tariff-related supply chain concerns prompted early orders. Despite solid spending, tariff policy uncertainty blurred the lines between real demand and precautionary measures.
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