Economic Viewpoints
(Source / US Chamber, August 2024)




Inflation is headed in the right direction. July saw annual inflation at 2.9%, marking the first dip below 3% since 2021. This is, however, still above the Federal Reserve’s target of 2%.

Why it matters: Moderating inflation can make business planning more predictable, helping companies be more productive. This will support faster economic growth and higher wages.

Big picture: Prices have risen by 17.5% cumulatively since inflation took off in March 2021, while wages have grown by 9.8%, leaving many behind.

  • Faster economic growth leads to increased job opportunities, higher wages, and a better quality of life.
  • That’s why the Chamber is calling on candidates and elected officials to lay out plans to achieve at least 3% annual real economic growth over the next decade.

Looking ahead: Inflation’s slowdown, combined with a cooling labor market, likely means the Fed will lower interest rates in September.


Where are Mortgage Rates Headed?

March 21, 2024

Don’t expect mortgage rates to fall anytime soon. The average rate for a 30-year fixed rate mortgage is around 6.7% and has been hovering just below 7% for months.

Why it matters: Homebuyers, and the real estate market in general, want rates to fall so buying is more affordable.

Be smart: The financial markets expect the Federal Reserve to lower interest rates later this year, then hold them steady.

Looking ahead: Despite high mortgage rates, demand for housing will continue to outpace supply, keeping prices elevated.

While this will be frustrating for buyers, sellers will shoulder some of the burden as they will not be able to raise prices as much as they would have when rates were lower.


Consumer Attitudes Toward the Economy Remain Steady

March 20, 2024

Consumer sentiment about the economy, as measured by the University of Michigan, fell in early March. It has moved little over the first three months of 2024 after rising at the end of 2023.

Why it matters: Economists have long used consumer sentiment as a leading indicator for the economy, because when consumers feel better, they spend more, and vice versa.

  • But over the last few years, there has been a split between headline economic data such as GDP growth, jobs, and income gains and how consumers feel about the economy. Positive data has not moved consumer sentiment.

Bottom line: Consumers are in a holding pattern in how they view the economy. Since consumer sentiment has become a less reliable indicator for tracking economic developments than it has been in the past, I will be focusing my updates on other data.

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