Bank of America's 2024 Predictions and the US Economy | Weekly Business Briefs w/ Martin Perdomo

Are you ready to peel back the layers of the latest economic trends? This episode offers a deep dive into the current state of unemployment in the US, and what this could mean for our financial future. We crunch the numbers straight from the US Department of Labor's weekly report, shedding light on alarming increases in unemployment claims in California and other states. The discussion explores the possibility of a looming recessionary period, and the potential benefits of interest rate cuts as a financial relief measure.

Could there be a significant shift in the economic climate on the horizon? This episode also explores Bank of America's forecast for 2024, predicting cooling inflation and a soft landing for the US as we continue to recover from the pandemic's impact. But that's not all, we delve into the repercussions of the longest streak of gas price declines in over a year. As the presidential election looms, we examine the policy uncertainties that could reshape the economic landscape. We're cutting through the complexity, providing thoughtful analysis on these pressing issues. Tune in!

Transcript

Speaker 0: 0:00

Unemployment claims in California increased last week, interest rate cuts are coming next year, bank of America says, and US gas prices have tumbled for two months to notch their longest streak of declines in over a year. These are the top three headlines in this week's weekly business brief. First up initial filings for unemployment benefits in California rose last week compared with the week prior, the US Department of Labor and Statistics said on Thursday. According to records searchlight, initial filings for unemployment benefits in California rose last week compared with the week prior. The US Department of Labor and Statistics said on Thursday New jobless claims of proxy for layoffs increased to 52,261 in the week ending November 17, up from 44,350 the week before. The Labor Department said US unemployment claims dropped to 209,000 last week, down 24,000 claims from 233,000 the week prior. On the seasonally adjusted basis, kentucky saw the largest percentage of increase in weekly claims, with claims jumping by 108%. Utah, meanwhile, saw the largest percentage of drop in new claims, with the claims dropping in by 27.9%. The USA Today Network is publishing localized version of this story on its news sites across the country, generated with data from the US Department of Labor's weekly unemployment insurance claims. So interesting because we are seeing unemployment start to tick up, and these are all signs of a recessionary period up ahead.

Speaker 0: 1:38

Next up, americans could finally see some financial relief in 2024. Reported by the Business Insider, on Monday, bank of America released its outlook for the upcoming year and following the year cooling inflation and no recession as the US continued to recover from the pandemic. The bank predicts Americans are due for interest rate cuts beginning in the middle of 2024. We'll have to wait and see. I don't know that I totally agree with them, but I think, if unemployment keeps going up the way it's going up, that the Fed's hands will be forced, while the bank expects Americans to soon feel the impact of Federal Reserve interest rate hikes over the past two years, which will ultimately weaken growth and lead to a higher unemployment rates. If forecast a soft landing in which the country can continue to financial while avoiding a severe economic downturn, and I quote, 2023 defied almost everyone's expectations recessions that never came, rate cuts that didn't materialize, bond markets that didn't bounce except in short-lived vicious spurs and rising equities, and pained most investors, who remain cautiously underway. Candice Boeing, head of both our global research, said in a statement Michael Gaspin, the head of the bank's US economic team, expects the first Fed rate cut to come in June, at the pace of cuts around 25 basis points per quarter through the end of the year. The bank did note, however, that there is policy uncertainty as the presidential election approach and it could have implications for interest rate, depending the candidate's economic approach.

Speaker 0: 3:15

Lastly, us gas prices have dropped for 60 consecutive days, notching their longest streak of declines in more than one year. The average gallon of gas in the US cost $3.25, about 30 cents less than the same time last year. According to Bloomberg, in 14 states one gallon cost drivers less than $3. Wow, that's great. That means Americans are saving some cash at the pump just as a critical holiday shopping season kicks off. The streak of declines is also a welcome sign of the Biden administration, which has tried to push inflation fighting might of Bidenomics in the bid for reelection of 2024. Gas prices hit $4 and changed last year the last day, but they've been extremely insane. In this coincidental that now this administration manages to get gas prices to these levels right before an election. Right before an election, I mean guys, come on, this is obvious, right, the games and the politicians on both sides.

Speaker 0: 4:21

By the way, gas prices have broadly tracked the price of crude oil, which have tumbled over recent weeks as OPEC grapples with the Saudi Arabia's production cuts and disagreements with the energy cartel over output. The group was meant to convene over the weekend, but pushed back its meeting to November 30. Meanwhile, the Federal Reserve's aggressive interest rate hike since March of 2022 has weighed on economic growth and consumer spending, which analysts point to as one reason contributing to softer oil and gas prices. On Monday, west Texas Intermediate did.8% to $74.92 barrel, while bread crude, the international benchmark moved lower to 0.7% To $80.03 per barrel.

Speaker 0: 5:06

What do you think? Do you think that the politicians are playing the games of dropping oil prices, pushing, maneuvering oil prices? By the way, I read an article the other day, and I'll share this with you, that oil production for America has gone up like by 800% or something like that. Don't quote me in the percentage, but something insane that our oil production has gone up and my question is how did we reopen the pipelines? What is going on? Do you agree that Americans can finally see some financial relief in 2024? What are your thoughts? And this has been your weekly business brief. I'll see you guys next week. Peace.