Economy.com Daily Update: January 31, 2025

Today's Economy

Income and spending rise, while inflation remains in focus.

Businesses heaved a sigh of relief after the start of the Trump administration in the U.S. did not bring a tariff tsunami.

Our baseline assumption is for a 5-percentage point increase in U.S. tariffs on EU goods, phased in throughout 2025.

The fourth-quarter numbers were a mild disappointment, but they are not a signal of recession.

Commentary

GDP data were grim, but low unemployment leaves hope for consumers in 2025.

The January employment report coming next Friday will provide the latest read on how the labor market is holding up to start 2025.

Argentina's manufacturing is poised to benefit from reduced inflation and a resurgence in credit.

The BoJ has done a better job explaining when it will hike—but not why.

Today's Economic Indicators

World
Moody's Analytics Global Risk of Recession
Jan. 2025: 18.0%
World recession risks rose ever so slightly to 17.98% with data through November, indicating a low risk of global recession.

Thailand
Industrial Production
Dec. 2024: -2.1% y/y
Thai industrial production fell 2.1% year on year in December, undershooting our expectation for 0.1% growth.

Thailand
Foreign Trade
Dec. 2024: US$0.0 bil
Thailand’s foreign trade deficit narrowed to $10.6 million in December from $224.4 million in November.

Germany
Retail Sales
Dec. 2024: -1.6% m/m
In December, German retail sales declined 1.6% from November in real terms and 0.9% in nominal terms, after adjusting for calendar and seasonal effects, while showing a 1.8% and 3% year-on-year increase, respectively.

Spain
Retail Sales
Dec. 2024: 1.5% m/m
In December, Spain's retail sales rebounded by 1.5% compared with the previous month, when adjusted for seasonality and calendar effects, after a 0.7% decline in November.

Germany
Unemployment
Jan. 2025: 6.2%
Germany’s labor market continued to weaken in January, with the unemployment rate increasing to 6.2%, a bad start for the first quarter.

Chile
Retail & Wholesale Sales
Dec. 2024: 6.4% y/y
Consumer spending in Chile finished the year on a strong note, with retail sales growing for the fifth consecutive month on a seasonally adjusted basis.

Brazil
Employment Situation
Dec. 2024: 6.2%
Brazil’s unemployment rate ended the year with a marginal increase as the economy showed mild signs of moderation, although unemployment remains at historic lows.

Canada
Gross Domestic Product by Industry
Nov. 2024: -0.2% m/m
In November, Canada's real gross domestic product contracted by 0.2%, its largest decline since December 2023 and the first loss in output since March.

United States
Employment Cost Index
2024Q4: 0.9% q/q
The Employment Cost Index rose 0.9% in the fourth quarter, slightly above our expectations, as compensation growth increased to close the year.

United States
Personal Income
Dec. 2024: 0.4% m/m
Nominal personal income rose just 0.4% in December, as expected.

United States
PCE Deflator
Dec. 2024: 0.3% m/m
Inflation pressures were mild in the final month of 2024.

United States
Real Personal Spending
Dec. 2024: 0.4% m/m
Real consumer spending finished 2024 on a high note, with growth accelerating in December.

Chile
Employment
Dec. 2024: 8.1%
The Chilean labor market lost steam in the final quarter of 2024 as hiring decelerated amid a sluggish economy.

Chile
Manufacturing Production
Dec. 2024: 8.4% y/y
National manufacturing production reported a strong rebound at the end of the year after hesitating in the previous few months.

United States
Moody’s Analytics House Price Index
Dec. 2024: 5.0%
House price appreciation accelerated in December, according to the Moody’s Analytics Home Price Index.

Colombia
Monetary Policy
Jan. 2025: 9.50%
Colombia’s central bank board left the reference interest rate unchanged at the first meeting of 2025, pausing the monetary relaxation cycle that started in December 2023.

United States
Agricultural Prices
Dec. 2024: 5.3% m/m
The Agricultural Prices Received Index rose 5.3% in December to 126.5.