Bloomberg Surveillance
The US Economic Outlook and Examining Tariffs
Oct 23, 2024
Frances Donald, Chief Economist at RBC, discusses the nuances of the US economic landscape beyond the soft vs. hard landing debate. David Kelly from JP Morgan highlights the mixed signals in the global economy while navigating post-cycle realities. Ernie Tedeschi, from the Yale Budget Lab, critically examines the financial implications of tariffs initiated under Trump, emphasizing their impact on consumers rather than job creation. Kristen Bitterly, from Citi, stresses the need for robust retirement planning amidst current market challenges.
30:33
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Quick takeaways
- The economic landscape reflects a K-shaped recovery, highlighting significant disparities between thriving sectors and struggling low- to middle-income consumers.
- Cautious investor sentiment is prevalent, influenced by high valuations and market volatility, prompting diversification strategies in light of potential economic downturns.
Deep dives
Consumer Challenges and Pricing Power
The general state of low and middle-income consumers is becoming increasingly difficult, impacting pricing power for businesses. With diminishing excess savings and stagnant real wage growth, these consumers are facing higher expenses in essential areas like food and energy. This trend indicates that companies might struggle to pass on costs without risking sales as the disparity grows between higher and lower income households. As such, businesses need to carefully evaluate their pricing strategies depending on their target demographics.
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