American consumers are not feeling the holiday cheer: concerns about what's ahead for the economy shot up as tariffs loom, according to a barometer of consumer confidence released on Monday.

Why it matters: The post-election bump in consumer confidence in November now looks like a blip, at least by one measure.

• Long-running economic pessimism lives on despite solid economic conditions — a sign the next administration might see consumer moods at odds with economic indicators.

What they're saying: "Compared to last month, consumers in December were substantially less optimistic about future business conditions and incomes," says Dana Peterson, chief economist at the Conference Board, the group that has measured consumer confidence for decades.

By the numbers: The Conference Board's consumer confidence index fell by 8.1 points this month, reversing the prior two months' gains and remaining at the somewhat depressed level that has prevailed in the past two years.

• December's drop was overwhelmingly a result of more pessimism about income, business and labor market prospects in the months ahead.
• A sub-index that measures consumer expectations fell almost 13 points last month alone, "just above the threshold of 80 that usually signals a recession ahead," the Conference Board said in a release.

The intrigue: It's more likely now than ever before that politics will skew measures of confidence. That is why Republicans' economic outlook surged after the election and Democrats' view soured, with little change in the actual economic backdrop.

• The Conference Board does not report consumer confidence by political party. But the group said consumers mentioned politics more often this month as the key factor affecting how they view the economy.
• Mentions of tariffs, the centerpiece of Trump's agenda, continued to rise. Roughly 45% of consumers expected tariffs to raise the cost of living, while 21% said it would create more jobs.

Between the lines: Worries about the inflationary fallout from potential tariffs has not translated into diminished buying plans for cars, the group said — among the items that could be most impacted by Trump's tariff plans.

• Plus, the average inflation expectation in the year ahead in the survey was steady at 5%, the lowest since March 2020.
• Inflation remains somewhat elevated, with little progress in recent months toward dropping further — the reason why the Federal Reserve does not expect to reduce interest rates in 2025 nearly as much as it did earlier this year.

The Biden administration said on Monday it launched an investigation into China's semiconductor sector, which officials claim threatens U.S. national security.

Why it matters: It is a first step toward possible measures, like tariffs, that might seek to squeeze China-made chips out of U.S. products. But with one month left in office, the fate of the investigation — and the ultimate remedies — rests with President-elect Trump.

The big picture: The investigation will largely focus on China's foundational semiconductors — key inputs in automobiles, medical devices and military defense systems. These are distinct from advanced AI chips, though those have also been targeted by Biden.

• The probe will be conducted under Section 301 of the Trade Act, which the Biden administration previously used to impose steep tariffs on Chinese imports of electric vehicles, batteries and solar equipment.

Between the lines: This investigation will be in its early phase when Biden leaves office next month — like others under Section 301, the probe may take as long as a year to complete.

• Senior administration officials say initiating the investigation now builds a record for the incoming Trump administration to pick up.
• China doesn't stop pursuing its policies just because the U.S. is going through a transition, the officials said.

What they're saying: Commerce Secretary Gina Raimondo told reporters that Chinese manufacturers sell chips for ultra-low prices around the world, which makes it less appealing for other companies to compete.

• "We've seen chips companies hesitate to invest in the U.S.," Raimondo told reporters, keeping America reliant on China for chips.
• "We saw during COVID what happens when we need a chip and we can't have it — it fuels inflation, makes cars and washing machines more expensive and left our military supply chain vulnerable," Raimondo said.

What to watch: It's unclear what priority the investigation gets under Trump.

• It would fall to Jamieson Greer, who Trump tapped to lead the Office of the U.S. Trade Representative, assuming he's confirmed.
• Tariffs are a central part of the president-elect's economic agenda. He plans to impose import taxes on his first day in office via executive orders, not the Section 301 process.

The bottom line: The investigation is a parting shot from the Biden-era White House, which implemented a slew of measures aimed at curbing imports from China over the course of Biden's term.

• U.S.-China economic relations will likely stay frosty under Trump.

The Federal Reserve's preferred inflation gauge slowed in November, the Commerce Department said on Friday — the first indication of cooling price pressures in months.

Why it matters: Inflation remains too high for policymakers' comfort, but the data offers hope that progress bringing it down might just be bumpy, not completely stalling out.

By the numbers: The Personal Consumption Expenditures Price Index rose 0.1% last month, the smallest increase since August.

• The core measure watched closely by economists, which excludes energy and food prices, rose by a similar amount — the slowest pick-up in prices since May.
• Relief from the report was evident in the bond market. Yields on the 10-year bond fell back to 4.5% after nearly hitting 4.6% on Thursday, following a run-up driven by the Fed's pullback on rate cuts.

Yes, but: There was less inflation progress when compared to the same period a year ago.

• From the same month one year ago, the PCE price index increased 2.4%, a tick up from October. Core PCE held at 2.8%.

The big picture: The PCE data came alongside updates on disposable income and spending.

• Disposable income rose 0.3% in November, compared to the 0.7% increase the prior month. Adjusted for inflation, income rose 0.2% compared to the 0.5% increase in October.
• Personal consumption expenditures (a measure of consumer spending) was stronger last month, rising 0.4%, up a tick from October. In real terms, the increase was 0.3%, up from 0.1%.

What to watch: The Fed cut interest rates for the third time this week, but signaled fewer cuts in 2025 because of stickier inflation. The Consumer Price Index, a separate measure of inflation released last week, came in hot again for November.

• Cleveland Fed president Beth Hammack — who dissented against the decision to cut rates, preferring instead to keep rates steady — on Friday flagged risks of higher inflation in the months ahead.
• "The economy's momentum and recent elevated inflation readings caused me to revise up my inflation forecast for next year," Hammack wrote in a blog post explaining the reasoning behind her dissent.

The U.S. economy grew at a 3.1% annualized pace in the third quarter — stronger than previously thought, the Commerce Department said on Thursday.

Why it matters: The revision suggests 2024 was yet another shocker year in which the U.S. economy surprised to the upside, as other major nations grappled with sluggish growth.

By the numbers: The revision is an upgrade from the initial estimate of 2.8% growth in the July-Sept. period.

• It largely reflects stronger exports and better consumer spending, offsetting a bigger-than-estimated drag from inventory investment.

The intrigue: The third quarter grew at a slightly quicker pace than the prior quarter, which expanded at a 3% annualized rate.

• A tool developed by the Federal Reserve Bank of Atlanta estimates the economy might be even stronger in the current quarter, with 3.2% growth.

What to watch: The Fed cut borrowing costs for the third time on Wednesday, but signaled fewer cuts ahead in 2025. One reason: the economy is hanging on while progress on slowing inflation has come to a halt.

• "What we see happening in the economy again is most forecasters have been calling for a slowdown in growth for a very long time, and it keeps not happening," Federal Reserve chair Jerome Powell told reporters at a press conference on Wednesday.

The bottom line: President-elect Trump will inherit a strong economy. Still unclear is how his proposed policies on immigration, taxes and tariffs will shape growth in the months to come.

Go deeper: Democrats are gloomy about the economy, and Republicans are optimistic

The Congressional Budget Office estimates sky-high tariffs promised by President-elect Trump might improve the nation's fiscal outlook — but at the cost of higher inflation and slower economic growth than would otherwise be the case.

Why it matters: The nonpartisan agency's findings are the highest-profile estimates yet of how such trade policy could slam consumers, businesses and the broader economy.

The big picture: The CBO's estimates, released in a letter to lawmakers on Wednesday, came at the request of Senate Majority Leader Chuck Schumer (D, N.Y.), budget committee chair Sen. Sheldon Whitehouse (D, R.I.), and Oregon Sen. Ron Wyden, who leads the finance committee.

• The lawmakers asked the CBO to look at a range of scenarios, including the combined economic and budget effects of a permanent 60% tariff on all Chinese imports, and a 10% tariff on all other goods imported into the country — the same trade policies promised by Trump.
• The estimates assume other nations slap retaliatory tariffs of the same magnitude on U.S. exports.

By the numbers: The CBO estimates tariffs would spur price hikes on consumer goods, at least initially.

• Higher tariffs on Chinese goods and all other U.S. imports would increase the Personal Consumption Expenditures index, a gauge of inflation, by a full point by 2026 — a notable risk as the Federal Reserve is trying to keep inflation at bay.
• After 2026, however, the CBO says that the tariffs would not have any "additional significant effects on prices."
• The CBO also said that poorer households would experience the largest drop in purchasing power, given that cohort spends the largest chunk of their income on goods.

As for economic growth, the CBO estimates the tariffs would lower GDP by as much as 0.6% in the next decade.

Yes, but: The agency notes the hit to growth might be offset as consumers and businesses replace certain imported goods with those made domestically.

Taking into account the economic effects, the CBO estimates tariffs would lower the budget deficit by up to $2.7 trillion over the next 10 years.

• The reduction of deficits might free up funds available for private investment, which provides a "substantial offset" to how much the agency anticipates tariffs would slow the economy.
• Without that effect, the CBO says the effect on GDP would be almost twice as large as their estimate.
• Still, the uncertainty associated with the policies might cause businesses to "delay or forgo new investments," while supply chain adjustments might prove costly.

The bottom line: The CBO says its estimates are highly uncertain, with little historic precedent of what tariffs of this size might do to the economy.

The Federal Reserve cut its target interest rate by a quarter percentage point Wednesday, while releasing new projections that signal less rate-cutting is on the way in 2025 than envisioned three months ago.

Why it matters: The Fed is entering a more cautious phase after cutting rates for three straight meetings, reflecting sluggish progress in bringing inflation down.

Driving the news: The policy-setting Federal Open Market Committee reduced the target range for the federal funds rate to between 4.25% and 4.5%, which makes for a full percentage point reduction in the target since rate cuts began in September.

• However, in September, the median top Fed official projected it would be appropriate to cut rates to 3.4% by the end of 2025. Now, that median projection is 3.9%.
• That implies only two rate cuts ahead next year, not the four signaled by previous projections. Fourteen of 19 top Fed leaders believe two or fewer rate cuts are likely to be justified in 2025.

What they're saying: "Today was a closer call, but we decided it was the right call," Fed chair Jerome Powell told reporters at a press conference on Wednesday, referring to the decision to cut rates.

• "We are at or near a point at which it will be appropriate to slow the pace of further adjustments," Powell added.

The intrigue: The S&P 500 fell as much as 2% during Powell's press conference. The yield on the 10-year Treasury note jumped to just over 4.5%, the highest level in more than six months.

Between the lines: Powell said that there is more uncertainty around inflation than previously believed. "It's kind of common sense thinking that when the path is uncertain, you go a little bit slower," he said.

• "It's not unlike driving on a foggy night or walking into a dark room full of furniture, you just slow down."

By the numbers: Fed officials bumped up their projections for GDP and inflation, reflecting the evolution of economic data since September.

• The median official now expects 2.5% growth for 2024, up from 2% in September.
• But the officials now expect core inflation to be 2.8% for the year, higher than the 2.6% projected three months ago.
• The officials also increased their 2025 and 2026 inflation projections, now seeing 2.5% inflation next year (up from 2.1% in September).

What to watch: After pushing rates sharply higher in 2022 and 2023 to try to combat inflation, the Fed is now moving to adjust them to a more neutral stance, neither stimulating nor restraining the economy.

• The economy faces a complex set of tailwinds and headwinds next year. The incoming Trump administration promises deregulation, tax cuts, and a growth-friendly approach — but also tariffs and deportations that are outside the Fed's control.
• Powell said some Fed officials began to incorporate "highly conditional estimates" of the economic effects that might play out from Trump's policy in their forecasts.

Of note: Beth Hammack, who became president of the Cleveland Fed earlier this year, dissented from the decision, preferring not to cut rates at this meeting.

• In a recent speech, she favorably cited past times when the Fed has cut interest rates by three-quarters of a percentage point — as it did in the last two meetings — before then pausing to assess conditions.

Editor's Note: This story has been updated with market reactions to the Fed decision.

One of the final major indicators of the year suggests a mixed narrative about consumer health during the holiday season: Spending is growing, but shoppers might be opening their wallets a bit more cautiously.

Why it matters: Consumer spending helped buoy the resilient economy in 2024, and any apparent slowdowns proved to be head fakes. But there is no guarantee it will continue in the months ahead.

What they're saying: "The headlines will say that retail spending remained resilient in November as consumers stocked up for the holidays," Nationwide senior economist Ben Ayers wrote in a note Tuesday morning.

• "But the underlying details suggest widening price-conscious shopping behavior as more households end 2024 on a cautious note," he added.

By the numbers: Retail sales rose 0.7% in November, a pick-up from the upwardly revised 0.5% increase in October.

• But much of the shopping activity was concentrated in a single category: cars. Spending at auto dealers surged almost 3% in November alone, following a 2% increase the previous month.

That is a "byproduct of dealer incentives offered to prospective buyers to clear excess inventory," Jim Baird, a chief investment officer at Plante Moran Financial Advisors, wrote in a note. (Our colleagues Tuesday morning wrote about the blockbuster deals for electric cars).

• "The go-go days of goods consumption have seemingly passed as consumers have tightened their belts to a degree," Baird added.

The big picture: The other bright spot in the report besides autos was online shopping, where sales grew by almost 2% last month.

• Spending fell across other categories, including grocery stores (-0.2%), department stores (-0.6%) and the catch-all category for various other shops (-3.5%).
• Consumers also pulled back at food and drinking establishments (-0.4%), the lone service sector category in the report.

Yes, but: Consumer spending has still strengthened over the past year. Retail sales, which are not adjusted for inflation, are nearly 4% higher than the same period a year ago.

• The cross-section of categories in the report that feed into GDP calculations still look OK in November, an encouraging sign for fourth-quarter growth: Retail sales excluding building materials, gasoline and autos rose 0.4%.

The bottom line: Consumers are not pulling back on spending in a way that would suggest the economy is in the midst of a downturn — but for those looking for signs of soft patches, this report offers some evidence.

• "From the Fed's perspective, scratching a little below the surface it will view this report as evidence of some moderate softening, consistent with another rate cut, but not evidence of any major weakening," Richard de Chazal, a macro analyst at William Blair, wrote in a note.

Global policymakers admit that how their economies fare next year largely rests on President-elect Trump and whether his trade agenda becomes a reality.

Why it matters: The economic backdrops in major nations from China to Canada are starkly different, but their outlooks all risk being blown up by tariffs.

• The extent of the blowback on the U.S. is anyone's guess.

The big picture: Central bankers try to prime financial markets for expected interest rate changes down the line.

• But now they are stepping into the equivalent of an economic void, with the unknown effects that a worldwide trade war — mixed with tax cuts, deregulation and other policy shifts — might have on inflation and growth.

"This is uncharted territory for central bankers," Brahima Coulibaly, vice president of global economy and development at Brookings and a former Federal Reserve Board economist, tells Axios.

• "They are less experienced and trained to manage policy and political uncertainty of this magnitude," Coulibaly adds. "Particularly in the United States, which emits the world's reserve currency and where policy has not historically been subject to significant unpredictability."

Between the lines: Trump promises to use tariffs liberally when he takes office, putting sky-high taxes on all imported goods. It would mark a step-up from his first stint in office, when just Chinese exports and select other products, like steel, were in the line of fire.

• Beyond Trump's claims that such policy will reinvigorate domestic manufacturing, tariffs now look like the go-to tool to extract desired changes from other countries.
• That leaves questions about how often (and by how much) Trump might raise the tariff stakes. For instance, Trump trade adviser Peter Navarro told Reuters the incoming president could "just raise tariffs higher" on China if the country devalued its currency.

"[T]he economic outlook is clouded by the possibility of new tariffs on Canadian exports to the United States," Tiff Macklem, the head of Canada's central bank, said last week after announcing a half-point interest rate cut to support its ailing economy.

• "No one knows how this will play out," Macklem added. "This is a major new uncertainty."
• Meanwhile, Chrystia Freeland — Canada's finance minister who resigned Monday — warned against new plans for government spending before Trump takes office: The country needs to keep its "fiscal powder dry today, so we have the reserves we may need for a coming tariff war," Freeland said in a statement.

Speaking in Frankfurt last week, European Central Bank president Christine Lagarde listed some of the unknowns: the scope of measures, the scale of retaliation and how trade traffic might be rerouted to avoid them.

• "That is a very complex situation, with movable parts," Lagarde said.

The Fed, which will probably announce a quarter-point rate cut this Wednesday, says it can't set policy based on how Trump's tariff agenda might take shape.

• The lack of clarity makes the Fed's projections, a fresh set of which are due out Wednesday, more hazy.
• "We don't know how big they'll be, we don't know the timing and duration," Fed chair Jerome Powell said at a New York Times conference this month. "We can't really start making policy on that. We have to let this play out."

Australia's head central banker, Michele Bullock, echoed that message last month. "We don't actually know what will happen. ... We can't be jumping at shadows."

The other side: The anticipation of Trump's policies alone was enough to push South Korean central bankers to lower borrowing costs for the second time in as many months — the nation's first back-to-back rate cut in 15 years, which surprised financial markets.

• The magnitude of the "red sweep" — on top of Trump's victory — "was well beyond our expectations, sending shockwaves with wide trade implications across the globe," the nation's top central banker said announcing the decision, according to The Korea Times.

What to watch: Trump's policies are anticipated to be inflationary, keeping rates higher in the U.S. That is one reason behind the U.S. dollar surge: a response to expected policy before Trump has taken office.

Continued dollar appreciation might wreak havoc around the world — one way the knock-on effects from tariffs might slam other nations.

• A stronger dollar here can stoke inflation abroad as imports get more expensive for nations with weaker currencies.
• For highly indebted nations, dollar-denominated debt becomes much pricier to pay off.

The bottom line: "The extent of the worry tends to be correlated with the extent of the dependence on the U.S.," Coulibaly says.

• "But given the role of the dollar and U.S. monetary policy, and the way in which it spills over into global financial markets, all countries are monitoring this."

Wholesale prices rose at a quicker pace in November, the latest evidence following Wednesday's CPI report that inflation is no longer cooling.

By the numbers: The Producer Price Index rose 0.4%, the biggest monthly gain since this summer. The index increased 3% in the 12 months through November, the largest increase since February 2023.

• A pickup in goods prices — largely for food — accounts for almost 60% of the index's monthly increase.
• Among the goods with the sharpest price increases: chicken eggs, which rose 55% in November alone. Prices for vegetables, melons, poultry and residential electricity also jumped.

Yes, but: Key PPI components that feed into calculations of the Fed's preferred measure of inflation, including portfolio management fees and hospital care, saw slower price gains or fell outright.

• Economists now anticipate that November's Personal Consumption Expenditures Price Index, to be released next Friday, will be better than previously thought.
• Both Morgan Stanley and Bank of America now estimate core PCE, which excludes food and energy costs, rose just 0.1% — a slowdown from the 0.3% increase in the previous two months.

What they're saying: "If our forecast proves correct, it would be a relief and leave us less worried about the recent trajectory of inflation," BofA economists Stephen Juneau and Aditya Bhave wrote in a note Thursday morning.

• "That said, the outlook beyond that remains murky," they add. "Progress on inflation has stalled of late, and there are upside risks to inflation on the horizon."

Confidence among America's top chief executives is soaring after President-elect Trump's re-election, with high hopes the former president will usher in an era of low taxes and regulations.

Why it matters: Mainstream economists warn the economy will take a hit from some of Trump's proposals, but business leaders see a brighter outlook for their industries in the months ahead.

• The Business Roundtable's latest economic outlook index — first seen by Axios — jumped 12 points from last quarter to the highest level in more than two years.

What they're saying: Cisco CEO Chuck Robbins, who chairs the Business Roundtable, said in a statement that top executives feel "energized" by Washington set to "consider measures that can protect and strengthen tax reform, enable a sensible regulatory environment, and drive investment and job creation."

By the numbers: Nearly 80% of the lobbying group's CEO members expect higher sales in the next six months, up from 71% who expected the same last quarter.

• Now more than 40% plan to increase capital spending, an increase from the 35% who previously said so.

What to watch: A smaller share of executives plan to lay off workers in the months ahead, while roughly 38% plan to increase their workforce — up 4 points from last quarter.

• But slightly more CEOs plan to keep their workforces steady (40%). That's in line with a dynamic playing out in the macroeconomy: The job market looks "frozen," with low firing and hiring rates.

The intrigue: It's not just big businesses that are more optimistic. An index measuring sentiment among small business owners also surged after the election — notching the single largest one-month gain in the survey's 40-year history, according to the National Federation of Independent Business.

• "The election results signal a major shift in economic policy, leading to a surge in optimism among small business owners," NFIB chief economist Bill Dunkelberg said in a release.

The other side: Economists, including some employed by firms whose CEOs belong to the Business Roundtable, say Trump's plans to slap across-the-board tariffs on U.S. imports is a risk to economic growth.

• In a statement, Business Roundtable CEO Joshua Bolten urged the incoming administration to avoid "overly-broad tariffs that could stoke inflation and raise costs for American businesses and consumers."

What to watch: That the election is over — without subsequent drama — might also be boosting CEO confidence.

• The economic backdrop has also improved. The labor market is still gently cooling, not sharply deteriorating as late summer data might have suggested.
• The Fed cut interest rates and signals it intends to lower them to a level that neither slows nor boosts the economy, though sticky inflation might delay the process.
• The global market selloff last quarter has given way to a rally with the S&P 500 near all-time highs.

The Consumer Price Index rose 2.7% in the 12 months through November — a bigger increase than the prior month — while the core measure that excludes energy and food prices rose 3.3%, the Labor Department said on Wednesday.

Why it matters: Inflation has plunged since the height of the crisis, but progress on cooling it further stalled out again last month.

By the numbers: CPI ticked up from the 2.6% increase in the year ending in October, while core CPI held at 3.3%.

• On a monthly basis, CPI rose 0.3% in November, after rising by 0.2% for three straight months. Core CPI rose 0.3% for the fourth straight month.

Between the lines: Housing has been the key component keeping inflation elevated.

• Even though price gains across the category slowed slightly in November, the shelter index still accounted for almost 40% of the increase in overall inflation last month.
• The shelter index rose 0.3% in November, down a tick from October.
• Rents rose 0.2%, while owners' equivalent of rent — which gauges how much it would cost homeowners to rent their own homes — rose by a similar amount.
• The Labor Department said these were the smallest monthly increases since 2021.

Among the other categories with faster price gains: hotels. Prices jumped 3.2% after rising just 0.3% in October.

The big picture: What looked like slowing rates of price gains earlier this year has given way to fears that inflation might get stuck above the 2% level desired by policymakers.

• "Growth is definitely stronger than we thought, and inflation is coming a little higher," Federal Reserve chair Jerome Powell said at a conference hosted by the New York Times last week.
• The Fed has cut interest rates by a combined 0.75 percentage point since September, when it looked like policymakers needed to worry more about the labor market — and less about inflation.
• That might no longer be the case: the Fed is likely to cut rates at the end of its two-day policy meeting next week, though it is unclear how officials see rates evolving in 2025.

Go deeper: Understanding Powell's Fed plan for Trump 2.0

Editor's note: This story was updated with additional context and a new chart.

Hiring rebounded in November as the effects of hurricanes and a strike that held down October numbers dissipated. But beneath the surface of the new numbers are some warning signs that all may not be well for American workers.

Why it matters: Robust headline job growth isn't telling the whole story, as the number of people unemployed, and the share not in the labor force at all, both increased.

• Meanwhile, wage growth actually ticked up, which could make some Federal Reserve officials wary of moving too aggressively to cut rates.
• The report should not incite meaningful worries about the labor market, wrote Seema Shah, chief global strategist at Principal Asset Management — but "there are cracks in the labor market that require Fed attention."

By the numbers: There were 227,000 jobs added in November, a gain that reflects employers adding workers back to payrolls as hurricane and strike effects subsided. September and October payrolls were revised up by a combined 56,000 positions.

• Leisure and hospitality and transportation equipment were among the sectors with strong jobs growth after flat growth and job losses last month.
• Average hourly earnings rose by 0.4% in November and have risen at a 4.5% annual rate over the last three months — rather elevated for the Fed's comfort.

Yes, but: That data is from the survey of establishments. The takeaway from households — the other survey that comprises the jobs report — is less reassuring.

• The unemployment rate, while still historically low, increased to 4.2% after moving sideways in the prior two months. Unrounded, the jobless rate came in at 4.246%, only slightly below the most recent high seen in July (4.253%).
• Roughly 193,000 workers dropped out of the labor force last month. Contrary to the hiring boom signaled by the establishment survey, this data shows there were 355,000 fewer employed workers relative to October.

Of note: The share of 25- to 54-year-old Americans who were employed fell for the second straight month. As of November, it is 80.4%, down from 80.9% in September.

• After reaching multidecade highs over the summer, it is now below its pre-pandemic levels.

Between the lines: The report still offers a green light for the Fed to cut its target interest rate at a meeting concluding Dec. 18.

• "The argument for the Fed to act preemptively to prevent further economic deceleration strengthened today," Lazard chief market strategist Ron Temple wrote Friday morning.
• But the outlook for policy in 2025 remains murky, given both uneven progress on inflation, mixed signals in the labor market, and the prospect of big policy changes in the new administration.

The U.S. economy added 227,000 jobs in November, while the unemployment rate ticked up to 4.2%, the Labor Department said on Friday.

Why it matters: The report reflects a strong bounceback of jobs after hurricanes and a major strike sidelined workers in October.

By the numbers: Two hurricanes and a now-resolved Boeing strike weighed on job creation during the period covered by the previous report.

• Employment in transportation equipment manufacturing jumped by 32,000 in November, "reflecting the return of workers who were on strike," the government said.
• The government also said that October job growth was better than initially thought, adding 36,000 jobs — about 24,000 more payrolls than the first estimate.
• The report also showed September's job gains were revised slightly higher to 255,000 from 223,000.

The big picture: The November jobs report offers a slightly clearer snapshot of the underlying health of the labor market. Other indicators, including low levels of unemployment filings, suggested the jobs market was still chugging along.

• Federal Reserve officials appear less concerned about the job market relative to earlier this year when the unemployment rate was inching higher. The Fed pivoted to cutting rates in September, in part, to preserve the labor market.
• "While I am pleased at how well the labor market has held up under restrictive monetary policy, I am less pleased about what the data have been telling us the past couple of months about inflation," Fed governor Christopher Waller said in a speech this week.

What to watch: The latest jobs data is unlikely to weigh on Fed officials' decision on whether to cut interest rates at its next policy meeting on Dec. 17-18.

• Financial markets see a cut as a near certainty: Market-priced odds of a cut rose to 89%, compared to about 69% before the release of the jobs report, according to the CME's FedWatch tool.

Go deeper: What's next for the "remarkably good" economy

Editor's note: This story was updated with a chart and additional developments.

The French government collapsed on Wednesday as parliament voted to oust Prime Minister Michel Barnier and his cabinet, throwing the nation into the worst political and fiscal turmoil in decades.

Why it matters: The chaos leaves Europe's second largest economy without a functioning government for the first time in 60 years — the most severe fallout to date from the efforts to shrink its deficit.

• It is the latest political drama to stem from a bleak fiscal situation that caused backlash from financial investors. The UK faced its own economic and political turmoil that forced its central bank to intervene in 2022.
• While an ocean away, it is a warning for President-elect Trump whose fiscal plans are expected to drive the deficit higher.

The big picture: Barnier was ousted after just three months in the job. He was appointed by French President Emmanuel Macron, who called the snap elections that resulted in a deeply fractured parliament with no majority.

Catch up quick: The "no-confidence" vote was called this week after Barnier pushed through an unpopular social security measure without parliamentary approval.

• Barnier's budget proposal, which came against a fiscal backdrop that was worse than initially thought, included roughly $60 billion worth of tax hikes and spending cuts.
• France's far-right firebrand Marine Le Pen has led the opposition against the budget.
• The left-wing New Popular Front alliance joined forces with Le Pen's National Rally to pass the no-confidence motion.

The intrigue: Investors have been dumping French government debt, pushing up the nation's borrowing costs — upping the pressure to get its fiscal house in order.

• The yield on France's 10-year government bond briefly surpassed that of Greece, the country that faced its own devastating debt crisis a decade ago.

What's next: A caretaker government will have to lean on unprecedented measures to avert a shutdown this year.

• Macron will have to appoint a new prime minister.
• That official will begin the budget process again.

Unprecedented pushback helped soften the tougher regulatory rules awaiting the nation's biggest banks. President-elect Trump's return to the White House might kill them altogether.

Why it matters: Corporate America anticipates Trump will usher in an era of light-touch regulation. A regulatory overhaul meant to safeguard the financial system is on hold indefinitely, if not outright dead.

What they're saying: "A lot of bankers are dancing in the street," JPMorgan CEO Jamie Dimon said at a conference days after the election.

• Citi CEO Jane Fraser told CNBC: "I would expect a lighter version of the Basel III proposal," referring to the set of plans that would, among other things, require banks to have more capital.

Catch up quick: Regulators say higher capital levels provide a larger cushion in an economic shock.

• The big banks say they have withstood recent crises and the increase would have undue harm on the economy (and industry profits).

Between the lines: Capital requirements for the largest banks are proposed to increase by 9%, lighter than the 19% increase Biden-era regulators first imagined.

• It was a big win for the industry's intense lobbying efforts, but executives are now questioning why capital requirements need to go up at all — and they see the possibility that incoming Trump appointees will agree with them.

The intrigue: Regulators agreed to pause work on major proposals, including Basel III, until Trump takes office.

• Michael Barr, the Fed's vice chair for supervision, has led the charge on finalizing Basel III, the international accord for global regulatory standards first developed in the years following the 2008 financial crisis.
• But Barr also needs sign-off from two other regulatory agencies: the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation — both of which will see new leadership installed by Trump.

"It will be up to the incoming administration to decide how to proceed," Rep. Patrick McHenry, R-N.C., chair of the financial services committee, said in a statement to Axios.

• "If they do move forward with implementing the Basel Committee's recommendations, I'm confident it will be based on sound, objective analysis supported by data — not driven by a progressive agenda," McHenry said.

What to watch: Any revisions are anticipated to dilute the proposal further, while finalizing the rules will be dragged out longer — risking a slow death of the rules put forward last summer.

• "In the current political context, it is unlikely any rules will be made more demanding," Nicolas Veron, a senior fellow at the Peterson Institute who has researched financial regulatory reform, tells Axios.
• Veron says that the U.S. is behind on Basel, even taking into account how long these processes can usually be, which has slowed implementation in other nations, too.

While Trump has moved quickly in naming nominees for cabinet positions, he has not yet tapped key figures for bank regulation.

• Embattled FDIC chair Martin Gruenberg will step down Jan. 19, giving Trump a clear lane to nominate a replacement.
• The comptroller of the currency position is technically vacant — Michael Hsu serves in the role in an acting capacity.

Yes, but: Things are a little more complicated for the third key bank regulator, the Fed vice chair for supervision. Barr's term extends until July 2026, and he said last month that he does not intend to vacate the position early.

• Some in Trump's orbit have floated the idea of demoting or firing Barr, which could lead to a disruptive legal battle. Fed chair Jerome Powell has been adamant that such a move would be against the law.
• Powell's term as chair also extends well into Trump's term, ending in May 2026. No Fed governor slots are scheduled to open up until January 2026, a year into Trump's term.

The bottom line: The proposal is "not dead, but it will be dormant for a while," Ian Katz, managing director of Capital Alpha, tells Axios in an email.

• "It's possible that we get a proposal sometime next year, and then a final rule more likely in 2026, Katz says. "But it's also possible that we don't get anything next year, and that this basically stalls out for 18-24 months."

The Fed looks on track to cut interest rates again when its leaders meet in two weeks. But after that, it's anybody's guess how much easing will come in 2025 given the latest inflation trends.

Why it matters: Inflation progress has nearly halted as other uncertainties about the economy, including the possible effects of the next administration's policies, pile up.

• Fed officials are sounding more nervous about renewed inflationary pressures than a labor market cooldown, in contrast to three months ago when they first cut interest rates.

What they're saying: In a speech Monday, Fed governor Christopher Waller delivered the vivid monetary policy metaphor of the month, comparing the more than two-year battle against inflation to the tiring sparring in a mixed martial arts cage.

• "I feel like an MMA fighter who keeps getting inflation in a choke hold, waiting for it to tap out yet it keeps slipping out of my grasp at the last minute," Waller said at a conference hosted by the American Institute for Economic Research.
• "But let me assure you that submission is inevitable — inflation isn't getting out of the octagon," he added.

The big picture: Two key inflation reports for October — the Consumer Price Index and the Personal Consumption Expenditures Price Index — added to evidence that inflation was no longer on the steady downward trajectory as in months past.

• "After making a lot of progress over the past year and a half, the recent data indicate that progress may be stalling," Waller said.
• Waller added that it was "a risk but not a certainty" that inflation might get stuck above the Fed's 2% target. He pointed to similar inflation concerns last year that proved to be temporary.

The intrigue: As it stands, Waller said, he favors a rate cut at the Fed's Dec. 17-18 meeting.

• But that decision largely rests on "whether data that we will receive before then surprises to the upside and alters my forecast for the path of inflation," Waller said.
• Markets expect the same; Fed funds futures pointed to about a 69% chance of a rate cut late Tuesday morning, per the CME's FedWatch tool.

Between the lines: In a separate speech Monday, New York Fed president John Williams said there was reason to believe the disinflationary process would continue.

• If you strip out housing, food and energy costs, inflation rates are "roughly consistent" with those seen from 2002-2007, Williams said.
• He added that housing price pressures keeping inflation elevated should subside as more up-to-date data is folded into government reports.

What to watch: The October jobs report was muddled by hurricane and strike disruptions. Some of those effects may still weigh on the latest payrolls data to be released this Friday morning.

Where Wall Street analysts see caution, Americans see the good times rolling.

Why it matters: While it's a historically safe bet that stocks will rise over the long term, record bullish sentiment may signal more economic optimism than we've seen of late.

By the numbers: The largest share of consumers ever, at 56%, say the stock market will keep rising into next year, the Conference Board said yesterday — topping the previous monthly record we told you about in October.

The big picture: Strategists also anticipate higher stock prices in 2025, though how much higher is a point of contention. They warn that endless uncertainties — trade wars, economic slowdowns, Fed policy — could make markets more vulnerable than usual to a pullback.

Despite those risks, Americans no longer look to be in the economic funk that has prevailed in recent years.

• Consumer confidence, as measured by the Conference Board, edged up by 2 points in November, near the highest level since 2022. That captures at least some post-election sentiment; the cutoff date for results was last week.
• Recession fears are fading, with the smallest share of consumers anticipating a near-term recession since the group began asking the question in 2022.
• The labor market outlook improved: A smaller share of consumers said jobs were hard to get. Optimism about job availability down the line is at the highest in 3 years.

Yes, but: It's not all rosy. The top concern among all income groups was high prices, followed by tax policy, geopolitical concerns and social unrest.

• While consumer confidence is up overall, it's not rising among the richest or poorest Americans.

The bottom line: None of those concerns are dimming the (usually correct) view that the stock market will keep chugging along.

President-elect Trump will nominate Scott Bessent, a financier focused on global macroeconomics, as his Treasury secretary, which would make him the incoming administration's top economic official.

Why it matters: Bessent would bring to Treasury deep knowledge of bond and currency markets and a close relationship with Trump — as well as a surprising connection to hedge fund manager George Soros, mega-donor to liberal causes and bogeyman to the political right.

Zoom in: Bessent, 62, founded hedge fund Key Square Capital Management. Before that, he spent most of his career at Soros Capital Management, including as chief investment officer from 2011 to 2015.

• Bessent has been an avid fundraiser for Trump and a defender of the president-elect in media appearances.
• Trump has threatened to impose high tariffs on all U.S. imports. Some economists have warned that such aggressive tariffs could reignite inflation.

In recent interviews, Bessent has tried to play down Trump's trade threats.

• "The idea that he would recreate an affordability crisis is absurd," Bessent told Axios' Mike Allen in a phone interview this earlier this month.
• Bessent told Axios that Trump "regards himself as the mayor of 330 million Americans, and he wants them to do great, and have a great four years."
• He also told the Financial Times last month that the tariffs were a starting point for negotiations with trading partners.
• "My general view is that at the end of the day, he's a free trader," Bessent told the FT.

The intrigue: Bessent has been critical of the Federal Reserve and will likely be a key voice as Trump selects his appointees to run the central bank.

• Last month, he put forth a novel and unorthodox idea to name a "shadow Fed chair" who would be heir apparent to Jerome Powell when Powell's term is up in 2026. The idea was criticized for the potential impact on financial markets.
• Bessent has since backtracked on this idea. Speaking on CNBC earlier this month in the aftermath of the election, he clarified that he thinks the incoming Trump administration "should nominate the next Federal Reserve chair early."
• Powell, for his part, says he won't resign and that Trump can't demote Fed officials either.

What to watch: Bessent would be a key salesman for Trump's fiscal agenda on Capitol Hill at a pivotal time. A slew of Trump-era tax cuts will expire next year, even as Trump pledged a range of further tax cuts on the campaign trail.

• Bessent would also take charge of economic relations between the U.S. and the rest of the world.
• His would-be predecessor, Janet Yellen, imposed sanctions on Russia aimed at curbing the war in Ukraine.
• U.S.-China relations remain frosty, though Yellen established a so-called "Financial Working Group" with China — opening up channels between the two sides in the event of global market stress.
• The relationship between Bessent and Commerce secretary nominee Howard Lutnick will also be an open question - they have differing views on tariffs and were late rivals for the Treasury post.

Bessent is married to John Freeman, a former prosecutor, and they have two children. If confirmed, Bessent would be the first openly gay Treasury secretary. They live primarily in Charleston, S.C., and preserve historic mansions, per the Wall Street Journal.

Go deeper: Axios interview: Treasury frontrunner Scott Bessent, Wall Street's "quiet killer"

President-elect Trump will nominate Scott Bessent as Treasury secretary, positioning him as the top economic official representing the nation on the world stage.

Why it matters: The pick caps intense jockeying for the influential role that, at times, spilled out into public view. The process has been closely watched by financial markets for what it might signal about the direction of Trump's economic policy.

Zoom in: Bessent, 62, founded hedge fund Key Square Capital Management. Before that, he spent most of his career at Soros Capital Management, including as chief investment officer from 2011 to 2015.

• Bessent has been an avid fundraiser for Trump and a defender of the president-elect in media appearances.
• Trump has threatened to impose high tariffs on all U.S. imports. Some economists have warned that such aggressive tariffs could reignite inflation.
• In recent interviews, Bessent has tried to play down Trump's trade threats.
• Fund manager John Paulson, a close Trump adviser who was initially the favorite for Treasury before backing out of contention, called Bessent "an outstanding pick" in a statement and said "we are off to a great start."

What to watch: Bessent would be a key salesman for Trump's fiscal agenda on Capitol Hill at a pivotal time.

• There are big questions about the fate of Trump-era tax cuts expiring next year — and the range of other tax cuts promised on the campaign trail.
• Bessent would also take charge of economic relations between the U.S. and the rest of the world, with Trump's threat of tariffs — and an ensuing trade war — looming.
• His would-be predecessor, Janet Yellen, imposed sanctions on Russia aimed at curbing the war in Ukraine.
• U.S.-China relations remain frosty, though Yellen established a so-called "Financial Working Group" with China — opening up channels between the two sides in the event of global market stress.

The intrigue: Bessent was seen as the front-runner for the role until a late push for the job by transition co-chair Howard Lutnick, who ended up being picked for Commerce secretary.

• Lutnick, who is more of a hardliner on tariffs than Bessent, will have oversight of trade issues.

Editor's note: This story has been updated with reactions to Bessent's nomination.

Economists warn that the tariffs promised by President-elect Trump will be a drag on the economy. For now, attempts to get ahead of tariffs might be a meaningful, if fleeting, boost to growth.

Why it matters: Some companies are pushing through orders sooner to try to beat the clock on the expected harsher trade regime — the type of activity that, if widespread enough, could temporarily jolt GDP.

• These maneuvers to navigate the tariff agenda can potentially make economic data messy, volatile and difficult for policymakers to judge the underlying economy's health.

What they're saying: "The economy is already strong and it might get a boost via an increase in orders," Joe Brusuelas, chief economist at accounting firm RSM, tells Axios.

• Brusuelas estimates there could be a 0.2 percentage point increase in the current quarter — an effect he expects to reverse in the following quarters.
• "We're going to get this noise in one part of the economy that has to do with trade," he adds.

The intrigue: Brusuelas said he got inquiries from companies after the election, all asking about pulling inventory forward.

• "Eight years ago, companies thought tariffs were a negotiating tactic and they ended up on the wrong side."
• Businesses bear the cost of tariffs and typically pass it on to consumers. But that would be tough if buyers balk at higher prices.
• "Not every firm has the same pricing power," says Brusuelas.

The big picture: Trump wants businesses to rely less on imports. But the opposite is happening now: Companies are importing goods at a historic pace because of his election win.

• Toolmaker Stanley Black and Decker told investors Wednesday that it was investing in some inventory "for a number of reasons, not the least of which is tariffs," an executive said.

West Coast ports are handling more cargo than usual for the season. The consumer is strong, and shippers might divert containers to head off delays from possible East Coast dockworker strikes.

But port leaders say the Trump hoarding effect can't be counted out: "Most of the factories we talk to are running full tilt," Gene Seroka, head of the Port of Los Angeles, told reporters Wednesday.

• "People have been preparing for some time, 'How much cargo can I bring in before warehouses start busting at the seams?'" Seroka said.
• Seroka said a similar hoarding phenomenon happened in 2018: The port saw a run-up in cargo before tariff implementation, followed by a drop-off so sharp that the port's business fell by double digits.

All that said, any impact from these effects is, almost by definition, temporary. Companies aren't going to tie up capital and pay for warehouse space for years' worth of supplies just to front-run a tariff.

• "They can bring it forward but they can't do that much," Minneapolis Fed president Neel Kashkari told Axios last week.
• "It's a little bit like airlines that sometimes hedge fuel, but they can't do that for the next 10 years," Kashkari added.
• "It's a pretty long supply chain from Asia so it would be hard to pull forward very much," Norfolk Southern's Claude Elkins said at a conference Wednesday.

What's next: The longer-term question is how much a new tariff regime triggers fundamental rethinking of international supply chains.

• In what situations do companies reshore manufacturing activity, as the Trump administration will desire, versus paying tariffs and either passing higher costs on to customers or taking a hit to margins?
• As we noted last week, companies have already been rethinking the complex global supply chains with heavy dependence on China.
• Rather than make goods in one place and ship them worldwide, they are shifting toward locating production closer to the markets being served — a pattern a new wave of tariffs could accelerate.

The bottom line: Trump has yet to take office, but policies promised on the campaign trail might already be impacting the economy.