Inflation levels hold steady, as small business and consumer sentiment rise.
- In November, inflation remained at October levels. Rising costs for housing, cars, and medical care kept inflation from cooling further.1 Despite slowing price disinflation trends, markets celebrated the news: This data aligned with expectations and reinforced the likelihood of another Fed rate cut on December 18.
- While prices of many goods and services remained firm, gas prices continued their decline. According to AAA, the average price of a gallon of gas has declined nearly 20% since April 2024.2 Historically, falling gas prices lift consumer optimism as they feel a little less of a pinch at the pump.
- A recent New York Fed survey showed US households are feeling more optimistic about their finances. In fact, the survey reported its highest confidence level since February 2020.3 While the reasons for this optimism aren’t clear, the end of a long election season and higher stock markets likely played a role.
- Not to be outdone, small business sentiment saw its biggest boost in 3 years — reminiscent of the surge following the 2016 election.4 Small businesses account for over 60% of new job hires. Higher sentiment could bode well for jobs, continued consumer spending, and further economic growth.
Institutional Portfolio Manager, Strategic Advisers LLC
"Optimism is up, and so are expectations for US stocks. While market volatility is a normal response to news and changing events, so far, the year is finishing strong with a growing US economy and corporate earnings that are projected to rise in 2025."
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For over 30 years, Strategic Advisers and its dedicated group of seasoned investment professionals have helped clients reach their financial goals. Our team of portfolio managers, with specialized areas of focus in asset allocation and specific asset classes, along with our deep quantitative and fundamental research, drive our investment selection and risk management decisions on behalf of our clients.