Economic Update | October 2024

This month, Ginger Chambless, Head of Research for JPMorgan Chase Commercial Banking, provides perspective into the latest stats on labor, inflation, commodities and other factors affecting the economy.

Economy: There is Increased Optimism for an Economic Soft Landing

U.S. economic activity has been resilient as consumers, businesses and markets have handled inflation and high interest rates better than expected.

Labor: Coming into Better Balance After Pandemic-Driven Dynamics

Labor markets—a key watch item for the Fed—have cooled over the last few months. Further softening in upcoming reports could support another 50bp reduction to the Fed Funds rate in November.  

Inflation: Goods and Services Inflation are Normalizing at Different Rates

Even as inflation has come down overall, there are still areas that remain elevated, mainly in services categories. Elevated shelter cost inflation is the primary driver of this stickiness.

Commodities: Metals Prices Are Higher in 2024

Commodities prices are mixed this year, with lower energy and food prices and generally higher metals prices. Gold is a standout, and year-to-date gains outperform most asset classes.

Interest Rates: Long-Awaited Easing Cycle Has Officially Started

Looking ahead, we expect 50-75bp of cuts before the end of 2024 and ongoing cuts of 25bp at each meeting in 2025 until Fed Funds reaches 3% around the middle of next year. 

Housing: Expect Lower Mortgage Rates to (Eventually) Support More Activity

Lower interest rates should eventually serve as a source of relief for the housing market, an important sector of the economy that has slowed significantly due to higher borrowing costs.

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