US Economic Notes_ What you need to know for the week ahead

Summary of Deutsche Bank US Economic Notes (13 October 2024) Industry Overview - Industry: US Economic Outlook - Company: Deutsche Bank Key Points and Arguments 1. Economic Forecasts: - Real GDP growth is projected at 2.4% for Q4 2024, 2.2% for Q4 2025, and 2.3% for Q4 2026 [3] - Unemployment rates are expected to decrease from 4.3% in 2024 to 4.1% by 2026 [3] - Core CPI is forecasted to decline from 3.3% in 2024 to 2.4% by 2026 [3] - Fed Funds rate is anticipated to drop from 4.375% in 2024 to 3.375% in 2025 and 2026 [3] 2. Upcoming Economic Data: - Key economic releases this week include retail sales and jobless claims, which are critical for estimating Q3 real GDP growth [6] - Retail sales are expected to show a strong performance, with a forecast of +0.6% compared to +0.1% previously [6] - Initial jobless claims are projected to rise to 270k due to recent hurricanes impacting the labor market [7] 3. Impact of Natural Disasters: - The recent hurricanes are expected to affect retail sales and labor market data, potentially skewing results in the upcoming months [6][7] - Hurricane Helene's impact may have boosted building supply and grocery store sales, while Hurricane Milton's damage could lead to increased jobless claims [6][7] 4. Political and Fiscal Considerations: - The upcoming US election on November 5 is anticipated to have significant growth and fiscal impacts depending on the candidates' policy proposals [8] - Tariffs are highlighted as a near-term risk to economic growth, while a split Congress could be beneficial for growth excluding tariffs [8] 5. Fedspeak and Monetary Policy: - Federal Reserve officials are expected to provide insights on the economic outlook, with discussions on potential rate cuts if labor market conditions weaken [4][5] - The divergence in capex components between the New York Fed and Philadelphia Fed surveys is noted, with implications for future capital expenditure growth [5] Additional Important Content - Retail Sales and Economic Indicators: - The report emphasizes the importance of retail sales data in shaping GDP estimates, with expectations of a healthy gain in retail control [6] - Industrial production and housing starts data are also highlighted as key indicators for economic activity in the coming months [7] - Analyst Insights: - The report includes insights from senior economists at Deutsche Bank, indicating a cautious but optimistic outlook for the US economy [3][4][5] - Disclosures and Certifications: - Important disclosures regarding the research and analyst certifications are provided, ensuring transparency in the analysis presented [12][13] This summary encapsulates the critical insights and forecasts from Deutsche Bank's economic notes, providing a comprehensive overview of the current economic landscape and anticipated trends.