Quo vadis, economic growth?

Macroeconomic update for July 2024  

We’ve passed the mid-year mark. With the world’s biggest economy having proven to be more resilient than expected, the calls for a recession in the US have all but dissipated, and instead the focus has turned towards a so-called soft landing or no landing. We believe that the US economy is likely to run out of fuel amid signs of a slowdown in the labor market, which in turn affects the country’s consumers. 

Key Takeaways

1. Is the US economy starting to sputter? 
   While the US labor market is still robust by historical standards, the first signs of a slowdown have emerged in recent months.
2. What signals has the labor market been sending? 
   Job vacancies in April were at the lowest level since February 2021, while initial jobless claims have been on the rise.   
3. Tweaking our asset allocation 
   After the sell-off observed in early June, linked to political developments, we’ve decided to upgrade our stance on Eurozone equities.

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