The week in review
- The Fed cut rates by 25 bps to a range of 4.25% – 4.50%
- Retail sales rose 0.7% m/m beating expectations
- Housing starts declined 1.8% m/m
The week ahead
- Consumer confidence
- New home sales
Thought of the Week
Investors have had reason to cheer in 2024, as economic growth held up better than expected and equity markets hit 57 new all-time highs. But, there are still a few lumps of coal under the tree. Progress on inflation has stalled and consumers continue to feel the sting of higher prices this holiday season. As seen in PNC’s Christmas Price Index, which measures the cost of each gift in the song “The Twelve Days of Christmas,” prices rose by 5.4% in 2024, the 21st consecutive year of y/y increases and up from 2023’s 2.7% gain.
Consistent with broader inflation dynamics, the service-related gifts were once again the main driver of inflation, rising 7.9% y/y compared to only a 1.1% y/y for goods-related gifts. If anyone’s looking for a new year’s resolution, it’s a lucrative time to pick up an instrument as the cost of both twelve drummers drumming and eleven pipers piping each rose 15.8% y/y. It also got 15.4% more expensive to gift every child’s favorite pet: six geese-a-laying. Elsewhere, price increases for eight maids-a-milking, seven swans-a-swimming, five gold rings, four calling birds and two turtle doves were stagnant in 2024, bringing some solace to the small bird shoppers that suffered through last year’s 25.0% y/y increase of turtle dove prices. However, the largest increase this year belongs to a partridge in a pear tree, which saw a 16.0% y/y gain entirely attributable to elevated pear tree prices due to higher housing costs, proving not all small bird lovers enjoyed a relief this year.
Looking ahead, inflation’s downward progress should continue, but 2025 will likely be another year of above trend inflation. Those in search of the best bargain might want to start thinking about next year’s gifts already!
Chart of the Week: Source: PNC Financial Services Group, J.P. Morgan
Asset Management.
Thought of the week: Source: PNC Financial Services Group, J.P.
Morgan Asset Management.
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Originally Posted December 23, 2024 – Weekly Market Recap
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