US Growth: Resilient leading indicators alongside resilient coincident growth

Our US growth leading indicator remains steady at around 2% annualized growth on a 6-month forward basis. The indicator is being supported by tight credits spreads, low layoffs and resilient service PMIs, which are helping to offset the drag from other leading indicators like building permits.

Most high frequency growth indicators we track still show resilient coincident growth. The Fed Weekly Economic index is running at 2.4% annualized, while GDPNow for the “core” private consumption and investment components is running at 2.5% annualized. TSA travel numbers also remain at the upper end of the post-Covid range.

As we laid out in our previous Note, Lessons from previous “no recession” Fed cuts (1984, 1995, 2024) (link), our roadmap remains that the Fed has eased monetary policy into a backdrop of elevated nominal GDP. This means the September Fed cut likely marks a tradeable low in yields and the USD while ultimately supporting further equity gains.