The U.S. Economy Is Not Slowing Down
That is not a problem, but it has implications for inflation and interest rates. Plus: inside the September 2024 NIPA revisions.
American incomes have been rising at a 6% annualized rate for the past two years—and this shows no signs of changing. Little wonder that measures of underlying inflation remain ~1-1.5 percentage points annualized faster than before the pandemic, even if productivity and employment also seem to be rising faster.
Rather than recapitulate how I think about these issues, this note will be relatively light on text to keep the focus on the charts.