Economy.com Daily Update: December 12, 2024

Today's Economy

Producer prices rose more than expected, while jobless claims increased for the second consecutive week.

The ECB opts for a 25-basis point interest rate cut.

Our estimate for fourth-quarter GDP jumped to 3.9%.

The incoming administration’s proposed policies will generate shock waves throughout the economy.

Commentary

All else equal, incomes would have to rise 73%, house prices would have to fall 42%, or interest rates would have to fall 4.8 ppt to get affordability to pre-pandemic levels.

New tariffs could prompt retaliation; the fallout would vary among countries.

The slowdown in real spending growth will not be a collapse and will take growth only a little below its long-run level.

The cost of a 60-month car loan versus the underlying five-year U.S. Treasury bond yield that serves as a pricing base has continued to rise.

Today's Economic Indicators

Sweden
Consumer Price Index
Nov. 2024: 1.6% y/y
Sweden’s CPI inflation rate was stable this November at 1.6% y/y.

Switzerland
Monetary Policy
Dec. 2024: 0.5%
The Swiss National Bank cut its monetary policy rate by 50 basis points to 0.5% at its December 12 meeting.

Ireland
Consumer Price Index
Nov. 2024: 1.0% y/y
Ireland’s consumer price inflation increased 1% in November after a 0.7% gain in October.

Brazil
Retail Sales Index
Oct. 2024: 6.5% y/y
Brazil’s household consumption advanced further in October, fueled by the steady spending recovery and employment in construction and services.

Mexico
Industrial Production
Oct. 2024: -2.2% y/y
Mexico’s industrial production experienced another year-over-year decline in October, continuing its downturn into the beginning of the new administration.

India
Industrial Production
Oct. 2024: 3.5% y/y
India's industrial production index rose 3.5% over the year in October.

India
Consumer Price Index
Nov. 2024: 5.48% y/y
India’s consumer price index rose 5.5% year over year in November, down from October’s increase of 6.2%.

Canada
Building Permits
Oct. 2024: -3.1% m/m
Building permit values in Canada declined by 3.1% in October, reaching $12.6 billion.

Euro Zone
Monetary Policy
Dec. 2024: 3.15%
In the end, the European Central Bank opted for a compromise at its policy meeting on Thursday, as usual.

World
Moody's Analytics Global CPI
Nov. 2024: 4.3% y/y
According to the Moody’s Analytics estimate of global CPI inflation, price growth inched lower to 4.3% y/y in November from 4.4% in October.

United States
Jobless Claims
December 07: 242,000
U.S. initial claims for unemployment insurance are on the rise again but do not yet pose a serious risk to the labor market.

United States
Producer Price Index
Nov. 2024: 0.4% m/m
In November, producer prices rose faster than expected.

United States
Quarterly Services Survey
2024Q3: 2.2% q/q
In the third quarter, revenue growth in U.S. service industries maintained an impressive pace.

United States
St. Louis Fed Financial Stress Index
December 06: -0.53
The St.

United States
Natural Gas Storage Report
December 06: -190 bil cubic feet
Natural gas storage draws accelerated meaningfully last week and surpassed analyst predictions.

Uruguay
Industrial Production
Oct. 2024: 7.5% y/y
Industrial production in Uruguay posted another solid figure in October.

United States
Financial Accounts - Households
2024Q3: $168.80 tril
Household wealth surged to another record high in the third quarter as equity prices drove a large gain in financial assets, more than offsetting a slight decline in the value of household real estate holdings.

United States
Financial Accounts - Nonfinancial Corporate
2024Q3: $33.94 tril
Nonfinancial corporations' wealth increased sharply to a record high in the third quarter.

Uruguay
GDP
2024Q3: 4.1% y/y
Uruguay's economy posted a higher-than-expected figure in the third quarter of 2024.

Japan
Tankan Survey
2024Q4: