Investment News For The Week Ended Friday, January 26

Published Friday, January 26, 2024 at: 9:12 PM EST

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The financial fake-out of 2023 extended into 2024 and is poised to continue pleasantly surprising investors. 

In a week filled with better-than-expected news, Bureau of Economic Analysis inflation data released Friday added weight to evidence that the Federal Reserve’s 12 interest rate hikes between March 2022 and July 2023 quashed a post-pandemic inflation crisis without choking growth and triggering a recession. Defying the Fed’s record for making bad monetary policy decisions and causing every recession in modern U.S. history — except for the short-lived but severe downturn after the Covid-19 outbreak in March 2020, the outlook remains bright. 

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The economy grew in the fourth quarter of 2023 at a 3.3% annualized rate. That’s double the 1.65% consensus estimate of 60 leading economists surveyed by The Wall Street Journal in early January.

In addition to showing no signs of recession, recent data now make a “soft landing” seem pessimistic. No landing is on the horizon for 2024.

The 60 economists surveyed in January see a slowdown ahead, but no recession.

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Disposable personal income (DPI) soared 7.9% in the 12 months ended December 2023. With an inflation rate of less than 3%, consumer purchasing power increased by nearly 5%, according to Friday morning’s data release. Gross domestic product data is subject to revisions at the end of February and March, but America’s consumer-oriented economy is growing at an unexpectedly high rate after adjusting for inflation. 

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Meanwhile, the Federal Reserve of Atlanta’s real-time algorithmic-driven growth forecast predicts a U.S. growth rate of 3%, much  higher than the forecast for .94% GDP in the first quarter of the year predicted by economists in the early-January survey by The Journal. 

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On Friday, Standard & Poor’s 500 stock index set a new all-time record-high closing price before closing fractionally lower, at 4890.97 on Friday, down -0.07% from Thursday, and up + 1.06% from a week ago. The index is up +118.60% from the March 23, 2020 bear market low. 

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This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation.

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