Joe, always good to see you. Thanks so much for joining me. >> Thank you.Very good to be with you, Jennifer. Happy holidays. >> Happy holidays to you.And what a way to kick off the holidays with such a stellar third quarter GDP number up 4.3% a full percentage point above expectations and driven by consumer spending up three and a half% though a large chunk of that from healthcare spending. Though we also saw trade really add to this number as well. Joe, can we see this level of growth sustained into next y ...

Economic Growth and Unemployment - The decoupling of jobs and growth could impact markets [1] - US growth was 28% in 2023 and 29% in 2024 [2][3] - The unemployment rate rose from 35% to 38% in 2023 and from 38% to 41% in 2024 [3] - A 35% to 4% growth rate with unemployment at 5% by the end of 2026 is a possibility [9] Productivity and Technology - America is becoming more productive [2] - COVID-19 forced increased productivity with fewer people [4][5] - Remote work and getting the right people into the right jobs contributed to productivity [5] - AI's impact on job creation is uncertain, but new jobs may be required for content moderation [10][11] Future Outlook - The exciting part of this is that we are supercharging this productivity story [8] - Deregulation and tax changes from the new administration could enhance productivity [8] - The focus should be on looking ahead rather than dwelling on the past [7]

Economic Outlook - Bank of America projects approximately 14% earnings-per-share growth for S&P 500 companies in 2026, with a modest index level upside of 4-5%, targeting a year-end S&P 500 around 7,100, indicating strong earnings but rich valuations [1] - The U.S. growth forecast is set at about 2.4% for 2026, which is more optimistic than the broader forecast clustered in the low-2% range, suggesting a long-term expansion rather than a short-lived burst [2][5][6] Global Economic Projections - Bank of America raises its China GDP growth forecast to about 4.7% in 2026 and 4.5% in 2027, attributing this to better-than-expected trade and supportive domestic policies [2] - The bank's outlook indicates a bullish stance on both the U.S. and Chinese economies, expecting above-consensus GDP growth [4] Interest Rates and Borrowing Conditions - The Federal Reserve is expected to implement two interest rate cuts in 2026, with the 10-year Treasury yield projected to end the year in the 4-4.25% range, suggesting slightly easier borrowing conditions compared to 2024-2025 [7] Economic Growth Drivers - Bank of America identifies five key forces driving the expected stronger growth in 2026, including lower rates, friendlier trade conditions, and lower energy prices, which will support emerging markets and import-heavy economies [8][9] - The "One Big Beautiful Bill Act" is estimated to add approximately 0.3-0.4 percentage points to fiscal-year 2026 GDP by boosting household spending and encouraging business investment [11] Labor Market and Inflation - Monthly job creation is expected to average around 50,000 in 2026, with the unemployment rate projected to rise into the mid-4% range, indicating a softening labor market but not a collapse [13] - Core PCE inflation is anticipated to remain above the Fed's 2% target at various points in 2026 due to tariffs, service-sector stickiness, and housing dynamics, despite cooling goods inflation [14] Investment Implications - The forecast suggests that ongoing economic expansion will be supported by investment and policy, with inflation and volatility still present, favoring consistent contributions to retirement accounts and diversified portfolios [18] - Professional investors are leaning towards a bullish outlook, with money managers becoming "ultra-bullish" on growth and increasing stock allocations late in 2025 [17]

Economic Growth - The US economy grew at an unexpectedly strong pace of 4.3% in the third quarter, marking the highest rate in two years [1][6] - This growth rate represents an increase from 3.8% in the previous quarter and surpassed analyst expectations of 3.2% [2] Consumer Spending - Vigorous consumer spending on services such as health care and products like recreational vehicles contributed significantly to the GDP surge [1] Employment and Retail Sales - The jobs market has faced challenges, with unemployment rising to 4.6% in November, the highest level in over four years [4] - Retail sales have slowed, even as upper-income households continue to spend, leading to weaker-than-expected earnings and outlooks from major businesses like Home Depot [4] Inflation and Price Trends - Inflation remains a concern, hovering above the Federal Reserve's 2% target, although consumer prices rose only 2.7% year-over-year in November, a smaller-than-expected increase [4][5] - The inflation data may be distorted due to challenges in data collection during the recent government shutdown [5] Tariff Impact - Businesses are uncertain about how much of the tariff costs to pass on to consumers, complicating the assessment of the full impact of tariff policies on prices [7] - The average annual rate of economic growth since President Trump's return to office is 2.5%, comparable to the 2.4% average recorded last year under former President Biden [7]

Economic Growth - US GDP grew by 43% in Q3 [1] - The actual growth of 43% surpassed expectations of 32% [1]

The US economy expanded in the third quarter at the fastest pace in two years, bolstered by resilient consumer and business spending and calmer trade policies. https://t.co/X5JPdsIVco ...

“When you go a very long period without recession, costs do begin to mount.” On “The Intelligence” @econcallum explains why uninterrupted economic growth is risky https://t.co/BEe6Wf3V8m ...

Market Focus - Western firms will shift focus to emerging markets due to stalled growth in America and Europe [1] - The majority of growth in the coming years is expected in Asia, the Middle East, and Africa [1]

Inflation Overview - Singapore's inflation in November remained steady at 1.2%, missing estimates of 1.3%, as higher service prices were offset by a decline in electricity costs [1] - Core inflation also came in at 1.2%, compared to expectations of 1.3% [1] Economic Performance - Non-oil exports surged 11.6% year on year in November, exceeding estimates of a 7% rise [2] - Singapore's economy grew at 4.2% in the third quarter, beating expectations of 4% expansion [2] GDP Forecast - The ministry of trade and industry upgraded the full-year GDP forecast to "around 4%" and projected 1%-3% growth for 2026, a significant revision from earlier warnings of potential zero growth [3] - The trade ministry noted that the global environment has proven more resilient than anticipated, with strong manufacturing and export demand in the third quarter [3] Monetary Policy - The Monetary Authority of Singapore (MAS) has maintained its monetary policy steady for the last two meetings after easing it in January and April due to global economic threats [4]

It's been a very strong year for the markets, by the way. A very strong year for Bank of America in the markets. The economy has done well, not as well, perhaps, as the markets might indicate.Do you think the economy is in better shape because the markets are really over predicting what's going on. Look, as you look at our team, we have a great research team. As you know, David, their projection for 26 is a strong economy, 2.4% U.S. GDP growth.And that's strong not only on a relative basis to trend above 2% ...