Q3 2024 Hive Research

The Q3 economic analysis shows encouraging trends, with inflation steadily declining and the Federal Reserve proactively cutting interest rates to support growth. Strong consumer spending indicates resilience in the economy, despite some challenges in the labor market. Overall, decreasing food inflation offers relief to consumers, contributing to a positive outlook.

KEY POINTS: 

• Inflation Trends: Inflation has been decreasing overall, although there was a slight uptick last quarter. The Federal Reserve has cut rates twice by 25 basis points each, but they remain cautious about future inflation, which may rise depending on legislative actions and tariffs.

• Economic Health: The economy is described as being in a strong position globally, despite a significant increase in the 10-year yield post-election, which could pressure borrowers, particularly in the mortgage market.

• Federal Deficit and Debt: Federal deficit spending has exceeded $2 trillion this year, with projections indicating that federal debt could reach 122% of GDP by 2034. Current trends do not show signs of substantial cuts to address this issue.

• Consumer Behavior: Jobless claims are rising but at a steady rate, while consumer spending remains high. However, consumer debt relative to disposable income is declining. There is a general sentiment among consumers that prices will increase in the future.

• Small Business Challenges: Chapter 11 filings have reached their highest level in over a decade, indicating significant challenges for small businesses. Additionally, while mortgage applications have decreased, demand for rentals is increasing.

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