Solid foundations, political threats

Daily update

With the wearisome repetitiveness of a tacky Christmas song, a US government shutdown is again threatened. A budget deal backed by president-elect adviser Musk and President-elect Trump failed to pass Congress. Absent a deal, the US government starts to shut down tonight. A short-lived shutdown affects government workers, but has limited economic impact. The longer a shutdown lasts, the more disruptive it is to the US economy. Economic data may not get published in a shutdown (a problem for Federal Reserve Chair Powell with their addiction to data dependency).
UK November government borrowing was less than expected. The tax authorities do tend to spot economic activity that statisticians overlook, so the tax revenue data may hint at better underlying economic growth.
US personal income and consumption data should continue to signal rising real incomes. The fact that household incomes are so strong, allowing consumption without use of savings or credit card debt, gives a solid foundation for US economic growth in 2025.
Today marks the final morning audio comment of 2024. Service resumes on 2 January 2025. I would like to wish everyone as prosperous a new year as circumstances will allow. And for everyone who has tuned in from time to time over the course of 2024, thank you for listening.