China added microwaves to home appliances that now quality for state subsidies in a trade-in program to spur consumption.
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China has expanded its trade-in program to boost consumer spending on home appliances.
The program, launched in March, includes subsidies and has shown positive results.
China faces economic challenges including deflation fears and low consumer demand.
China's cautious consumers are spending less, prompting Beijing to dish out incentives even for small home goods.
On Wednesday, China added home appliances, including microwave ovens, water purifiers, dishwashers, and rice cookers, in a trade-in program designed to spur demand.
The program, which was first rolled out in March, already included bigger appliances like refrigerators, washing machines, TV sets, and air conditioners. The Chinese government subsidizes up to 20% of the price of a new appliance.
The Chinese government, which had allocated 81 billion yuan, or $11 billion, for the trade-in program, said on Wednesday that the program had yielded positive results.
Li Gang, a Chinese commerce ministry official, said at a press conference on Wednesday that the trade-in program resulted in 920 billion yuan worth of auto sales and 240 billion yuan worth of home appliances sales last year.
China is trying to boost consumption in the world's second-largest economy, which is beset by multiple challenges including a property crisis and high youth unemployment.
China deflation fears
Economists are especially worried about a deflation spiral, which would result in a vicious cycle of dampened consumer demand and lower prices.
Official inflation data released on Thursday gave little cheer, with China's consumer price index last year inching up just 0.2% from a year ago.
In December, China's CPI edged up just 0.1% more than a year ago in its fourth straight month of decline, with food price declines dragging inflation down. In comparison, November CPI was 0.2% higher than a year ago.
The headline inflation figure did not fall into deflation territory thanks to non-food inflation — which edged up 0.2%.
However, the data about non-food prices "does not inspire too much confidence in an uptick of consumption yet," wrote Lynn Song, the chief economist for Greater China at ING, on Thursday.
Prices of clothing, education, and healthcare moved up in December.
However, prices of transportation, communications, daily use goods, and rent were in the deflationary zone.
Factory gate prices were in deflation for the 27th straight month.
Analysts generally expect China's inflation data to pick up this month thanks to seasonal factors as Chinese New Year, which starts on January 29.
However, official data about wholesale farm product prices in China so far this month point to food prices being "subdued and weaker than traditional seasonality suggests," wrote Nomura economists on Thursday.
Rep. Eric Swalwell, D-Calif., sparked online backlash with a post in which he questioned President-elect Trump’s ability to bring down grocery prices. Social media users were quick to point out that food prices spiked under President Biden's leadership.
"I don’t care if Donald Trump wants to buy Greenland. I just want to know what he’s going to do to lower the cost of groceries," Rep. Swalwell wrote on X.
But social media users noted that the congressman’s party had control of the House, Senate and White House while Americans struggled to afford food. While they later lost control of the House after the 2022 midterm elections, the Democrats held on to the Senate.
Swalwell later appeared to double down on his assertion that Trump will not lower grocery prices.
"Guys, it’s so obvious. Trump has no idea how to lower your cost of groceries. So he’s going to distract you by sending your kids to die fighting Canada," Swalwell tweeted.
However, this only brought more fury the congressman’s way, with social media users questioning why the congressman is not more worried about the fires raging in his state that has so far left two dead and forced thousands to flee their homes.
On Tuesday, President Biden released a statement on the deadly wildfires and announced that the Federal Emergency Management Agency had approved a grant to help fight the inferno.
"I am being frequently briefed on the wildfires in west Los Angeles. My team and I are in touch with state and local officials, and I have offered any federal assistance that is needed to help suppress the terrible Pacific Palisades fire," Biden said in a statement.
The Trump team has not responded to a request for comment.
Buffalo, New York, is set to be 2025's 'hottest' market once again, according to Zillow.
John Greim/LightRocket/Getty Images
Zillow has released its forecast for the hottest housing markets of 2025.
The metros are spread across the Northeast, Great Lakes, South, Midwest, and West regions.
Buffalo, New York, is projected to be the hottest market in 2025, followed by Indiana.
High home prices, rising mortgage rates, and inflation have sharply reduced buyer demand in the US real estate market, leading to a slowdown in home sales over the past few years — even in previously booming areas like Austin and the Bay Area.
Some areas are poised to see more action than others. Zillow has forecasted 10 metros where homebuyer competition will be the fiercest, taking into account factors like price growth, new construction, and job growth in each area.
Buffalo earned the title of Zillow's hottest market for the second year in a row. Located on Lake Erie and somewhat close to Niagara Falls, the metro has become an appealing choice for buyers thanks to its relatively affordable homes and strong job market, according to Zillow.
"Common threads among 2025's hottest markets are affordability — or at least relative affordability compared to nearby markets — and inventory shortages that have not been able to keep up with demand," Anushna Prakash, a data scientist at Zillow, told Business Insider. "An inventory shortfall of course limits sales, but it also means competition for each home on the market is ratcheted up."
Here are 10 metro areas forecast to see the most homebuying competition in 2025, according to Zillow.
In an address in December, Putin acknowledged the country's inflation struggles.
Sefa Karacan/Anadolu via Getty Images
Putin told Russia the nation would be fine in his New Year's address.
He refrained from giving a concrete outlook for the Ukraine war or Russia's economy.
The nation is facing growing costs from its invasion, from rising casualties to soaring inflation.
Vladimir Putin assured Russia he was "certain that everything will be fine" in his New Year's Eve address on Tuesday, as the nation heads toward its fourth year of war in Ukraine in 2025.
In his speech, the Russian president said the nation was overcoming various challenges and would continue to move on. He also referred to 2025 as the "year of the Defender of the Motherland," and gave respect to Russia's "fighters and commanders," The New York Times reported.
Still, Putin refrained from giving a concrete outlook on the war in Ukraine, or the path of the Russian economy going forward. He also did not mention Russia's inflation struggles, one of the nation's key economic problems.
The comments come amid swirling military and economic uncertainty in Russia, which is under increasing strain as its war against Ukraine is set to turn three years old in February.
A report from the Institute for the Study of War said that Russia suffered about 427,000 casualties in 2024 while gaining about 1,600 square miles of territory. Russia's military slowed its advances last month, with forces gaining around seven square miles of land a day in December.
On the economic front, the costs of Russia's invasion continue to mount. The nation has earmarked 13.5 trillion rubles for its defense spending next year, amounting to around a third of Russia's total federal budget.
Private business activity has also been hindered by the flight of capital and younger workers who fled the nation at the start of the war. An analysis from S&P Global showed that private equity or venture capital-backed deals and investments plunged 39% from 2022 to 2023.
Inflation, meanwhile, remains well above the central bank's 4% target, while interest rates have risen to 21%.
Putin has generally brushed off concerns about the Russian economy, but acknowledged the nation's struggle with inflation in a recent address. In December, he acknowledged that Russia's inflation rate was "alarming" and the economy was "overheating."
At the end of 2023, Putin apologized for the soaring price of eggs, adding the rapid price increase was a "failure of the government's work."
Economists expect 2025 to be another difficult year for the country, and some predict that its economy could be headed for a period of stagnation similar to the Soviet Union in the early 1980s.
TsMAKP, a think-tank tied to the Russian government, said the nation was at risk at stagflation, a dire economic scenario that typically involves spiraling inflation, sluggish growth, and rising unemployment.
There are a handful of bullish forces headed for markets and the economy next year.
Goldman Sachs said there are five factors providing a tailwind for the market next year.
Those include stronger growth, more rate cuts, and lower inflation.
Investors feeling nervous about markets and the economy have a number of reasons to cheer up, with several bullish factors set to keep the rally going next year, according to Goldman Sachs.
Economists at the bank made several predictions for markets and the economy in 2025, some of which buck current expectations.
Some investors are starting to sour on next year's outlook, with over 34% of traders saying they were bearish on stocks over the next six months, according to the AAII's latest investor Sentiment Survey.
Meanwhile, the Conference Board's Expectations Index, a measure of how consumers feel about various parts of the economy, dropped to near-recessionary levels in December.
Yet, a handful of factors could keep the economy going strong or even stronger in 2025.
Here are five bullish calls the bank has made for the coming year.
1. The economy could grow more than expected
The US economy could expand even faster than investors are currently expecting. Goldman Sachs forecast GDP to grow 2.4% year-over-year by the fourth quarter of 2025, above the consensus estimate of 2% growth.
That increase will largely be fueled by strong consumer spending. Americans, bolstered by a strong job market and increased wealth from holding stocks, will likely ramp up their spending by 2.3% on a yearly basis in 2025, Goldman predicted, on par with consumer spending growth seen over the last two years.
2. Business investment will take off
Investment by businesses will probably far surpass expectations, Goldman said. The bank predicted that private investment in the economy would climb 5% year-over-year in the fourth quarter, above consensus estimates of around 3% growth.
Private investment growth is expected to solidly beat expectations next year, according to Goldman Sachs.
Goldman Sachs Global Investment Research, Bloomberg
"While the factory-building boom subsidized by the Inflation Reduction Act and CHIPS Act will slow, spending on equipment for those new factories and for artificial intelligence, the reinstatement of tax incentives, rising confidence, and lower short-term borrowing rates for small businesses should fuel roughly 5% growth in business investment," economists said.
3. The job market will strengthen
The employment picture could look a lot stronger in 2025. Unemployment will likely fall back to around 4% by the end of 2025, Goldman predicted, slightly lower than the 4.2% jobless rate recorded in November.
"Job openings remain high and strong final demand growth should keep labor demand growing robustly. Meanwhile, the surge in immigrant labor supply that the labor market struggled to fully absorb this year has already slowed sharply and will fade further," the note added.
4. The Fed will cut rates more than expected
Goldman Sachs is expecting the Fed to cut rates three times next year, with decreases to the fed funds rate coming in March, June, and September. That reflects a slightly more aggressive pace of easing than what investors and Fed officials themselves are expecting, with the latest projections showing the central bank eyeing two rate cuts for 2025.
"Both our baseline and probability-weighted Fed forecasts are more dovish than market pricing, which reflects both our confidence that the underlying inflation trend will continue to decline and our view that the risks for interest rates from policy changes under the second Trump administration are more two-sided than widely assumed," the bank said.
Economists have said that some of Trump's proposed policies, like his plan to levy steep tariffs, could cause inflation to spike and interest rates to rise. Trump implemented tariffs during his first term as president without a significant price increase, but his tariff plan this time around is much broader, explaining the difference in inflation forecasts.
5. Inflation will keep cooling
Price growth, though, will likely continue to decline, Goldman predicted. The bank forecast core personal expenditures inflation —the Fed's preferred measure that excludes volatile food and energy prices — to fall to 2.1% by the end of next year, down from the 2.8% growth recorded in November.
The decline will be partly driven by "catch-up inflation" ending next year, the bank said, referring to how real inflation in the economy often lags behind the official statistics. Areas that typically lag, like car insurance and rent prices, have started to cool in recent months.
Official rent inflation figures have started to catch up with real-time rent data.
Goldman Sachs Global Investment Research, Department of Commerce
Wage growth, another factor that influences inflation, is also starting to cool, which should help lower price growth. Wages grew just 3.9% over the last year, down from the recorded 4.7% in 2023, according to Goldman Sachs data.
Goldman remains solidly bullish on stocks going into the new year. Previously, the bank's strategists predicted the S&P 500 could rise to 6,500 by the end of 2025, implying 10% upside from current levels.
Seventeen percent of respondents between the ages of 18 and 29 — the highest percentage of any age group surveyed —said they were not too or not at all satisfied with their jobs, per a Pew Research Center survey published on December 10.The 18- to 29-year-old cohort is predominantly Gen Z. Pew surveyed 5,273 US adults who were employed full- or part-time in October.
Additionally, 16% of respondents with lower family incomes said they are not too or not at all satisfied with their jobs, the highest percentage compared to middle- and high-income earners.
In recent years, job market challenges and rising prices have weighed on Americans, and it's affected how some of them feel about their current roles. While the unemployment rate remains low compared to historical levels, a widespread hiring slowdown has made it harder for somepeople to switch jobs. Additionally, while inflation has slowed, some people are frustrated that prices of goods and services are significantly higher than they used to be — and that their salaries haven't risen enough to keep up.
Meanwhile, some employed adults aren't satisfied with how much they're paid. Among the 29% of workers who said they were not too or not at all satisfied with their pay, the top reason they gave was that their wages haven't kept up with the cost of living.
To be sure, half of the Americans surveyed said they were extremely or very satisfied with their jobs while 38% reported being somewhat satisfied.
Are you feeling stuck in your current job? Reach out to this reporter at [email protected]
The traditional English carol "The Twelve Days of Christmas" has long been a favorite during the holiday season, standing the test of time through the centuries and inspiring amusing parodies like Bob Rivers' "Twelve Pains of Christmas."
But the song – which counts up from Christmas to Epiphany on Jan. 6 – has also become the peg for a whimsical way to gauge year-over-year inflation. Pennsylvania-based PNC Bank and other financial institutions have tracked the costs of each set of gifts from "Twelve Drummers Drumming" to a "Partridge in a Pear Tree" to see exactly how much it might cost a man to deliver each to his true love.
PNC’s Christmas Price Index indicated the overall cost of the song’s gifts increased 5.4% since 2023, totaling just under $50,000.
Meanwhile, the Texas-based business company Swyft Filings noted in 2023 that costs would also vary depending on each state. Taxes, regulations and other factors would be the most likely variables. The company found California, Hawaii and Washington to be the most expensive and Arkansas, Mississippi and Alabama to be the least expensive, given that variation.
Here's a breakdown of the costs counting down from the 12th day.
12 Drummers Drumming
PNC Bank cited wage inflation as the driving factor behind the increase in renting a 12-piece drum corps this year. Their estimated cost was $4,017; an increase of 15.6% over 2023.
Several websites estimated the average cost of a drummer for two hours was between $250 and $500, depending on the set. Taking the median of that rate and multiplying by a dozen drummers places the cost around $4,500, plus gratuity, of course.
11 Pipers Piping
Eleven flutists, or hiring an 11-piece wind ensemble, bear a similar cost-per-head as drummers.
In that regard, PNC Bank estimated the same 15.6% increase as the dozen drummers, with a final cost of $3,715.
10 Lords-a-Leaping
In the British political system, a lord is a title of peerage or nobility dating back to feudal England, and the House of Lords is the current name for the upper chamber of Parliament.
Placing the phrase in an American context, it remains illegal to physically or proverbially purchase a senator for any purpose including leaping, and public corruption has often been a topic in the media.
However, some estimates have been published on what the cost would be to pay 10 senators or lords to jump.
PNC reported 10 lords-a-leaping would be the most expensive purchase of the 12, with an estimated 2024 cost of $15,579.65 – an increase of 7.2% since 2023.
Nine Ladies Dancing
According to the website GigSalad, the average cost of a dance troupe for a 30-minute performance is between $200 and $400. The freelancing platform UpWork listed dancers for hire ranging from $30 per hour to more than $100 per hour.
The median cost per dancer per hour multiplied by nine comes out to $405 for a half-hour.
In PNC’s tracking, nine ladies dancing in the form of a professional troupe would cost $8,557 for an undisclosed set time, up 3% in the past year.
Eight Maids-a-Milking
Milk prices are back on the upswing in recent months, according to the Federal Reserve Bank of St. Louis. In November, the average price-per-gallon of whole milk was $4.14, an increase from a flat $4 that time last year.
The ubiquitous beverage saw a spike during COVID and settled in the two years since, but is on the increase once more.
Adding milkmaids to the equation, PNC Bank estimated a cost of $58, unchanged from 2023.
Seven Swans-a-Swimming
One Midwest swan farm listed the price-per-bird at $400. In 2020, the city of Lakeland, Florida, was dealing with an overpopulation of about 80 swans on a lake in the community outside Tampa. The going price then was also $400, according to CNN.
Listings on BirdsNow ranged from $400 to $2500, with a pair being markedly more expensive than two individuals. Altogether, PNC estimated the total cost to exceed $13,000, with no increase over 2023.
Six Geese-a-laying
While a South Dakota goose farm listed the price of an 8- to 10-pound goose for consumption at $140 each – calculating to $8,400 for a half-dozen, the cost of live geese that can lay eggs was different.
Prices for live goslings averaged $40 each online, or $240 for six.
PNC’s Christmas index, however, calculated the full cost at $900, or 15% higher than 2023.
Five Gold Rings
On Monday, gold futures hovered around $2,600 per ounce. While PNC estimated the total cost of five gold rings to be $1,245, the actual value may vary depending on the carats, size of ring and other factors.
There is some debate over whether the original lyric is really "four colly birds" versus "four calling birds." A colly bird is a blackbird in English vernacular. The term "colly" has its roots in how something looks when blackened by coal dust.
The cost of a live blackbird is between $150 and $225, and PNC estimates four to cost just under $600 – which indicates the lower end of that price spectrum. The bank estimated the cost remained unchanged since 2023.
Three French Hens
The French Bresse hen is considered one of the most sought-after chickens in the world.
Butchers in Paris were selling French hens for €40 per kilo or about $92 per pound. Live poults purchased from farms in the United States ranged from a few dollars up to about $250 as of Monday.
In PNC’s index, the cost of three French hens increased 5% from 2023 to about $347.
Two Turtledoves
In 1992’s "Home Alone 2: Lost in New York," Macaulay Culkin’s Kevin McCallister visits "Duncan’s Toy Chest" – a play on Manhattan’s iconic FAO Schwarz department store.
The elderly owner, played by Eddie Bracken, offers Kevin any one of his store’s Christmas tree’s ornaments.
Mr. Duncan tells Kevin he should keep one turtledove and give the second to "a very special person."
"Turtledoves are a symbol of friendship and love," he explains. "As long as you each have a turtledove, you’ll be friends forever."
Kevin ultimately gives the second turtledove to Brenda Fricker’s "Pigeon Lady" at the end of the film after she helps capture the movie's villains, Daniel Stern’s Marv and Joe Pesci’s Harry.
While that cinematic pair may have been priceless, PNC’s index placed the price of a pair at $750, and European turtledoves themselves are considered a threatened species.
And a Partridge in a Pear Tree
The Home Depot listed Bartlett pear trees at about $58 this week.
Additionally, in an American context, Alaska’s state bird – the Willow Ptarmigan – is a more common type of western partridge.
"Huns" or Hungarian gray partridges were also introduced in the Lower 48’s northwest in the early 20th century.
Costs of both live ptarmigan and ptarmigan meat were unavailable on Monday, but PNC estimated the combined cost as $160. The bank reported the cost of the bird remained the same, but the pear tree increased in price since 2023.
In its reporting on its own estimations, PNC officials said on the bank’s website that the internet has made the calculation and potential availability of the items in the ancient English carol much more accessible in the 40 years it has calculated their costs.
"Believe it or not, we're still seeing the cause and effect of the pandemic-inflation hangover, even nearly five years later," PNC Asset Management Group chief investment officer Amanda Agati said in a statement.
"With years of steep price increases, we'd think inflation has nowhere to go, but we'd be wrong. This latest PNC CPI is an accurate reflection of what we're seeing in the market."
Online purchases of the lyrical items were calculated to be more expensive online than at a brick-and-mortar store due to shipping costs.
The overall cost of the 12 Days of Christmas increased 133% in the past four decades, with factors such as minimum wage increases particularly affecting the for-hire gifts such as pipers and drummers.
If an enterprising fellow were to purchase his beau the song's 364 total gifts from the 12-day giving spree, it would rise from 2023 by 3.6% to an estimated cost of $209,272.
Higher salaries have helped them travel, pay off student debt, and improve their relationships.
However, landing a higher salary came with long hours and more responsibilities.
Landing a higher salary can be life-changing, saidfour Americans who've reached this pay threshold over the past decade.
Due to rising prices in the past few years, a six-figure income doesn't go as far as it used to,but for many people, it's allowed them to splurge on travelor establish financial security.
Most Americans aren't six-figure earners: The average annual salary for full-time workers was about $82,000 as of November, the latest data available, per a New York Fed survey.
Business Insider asked four people who've made more than $100,000 annually about the biggest benefits of having a six-figure income. BI has verified their six-figureearnings.
The perks include enhanced relationships
David Houde first earned a six-figure income in 2015. This year, he's earning roughly $144,000 annually as a software engineer. The 48-year-old, who's based in Michigan, said boosting his earnings made him less hesitant to spend money.
"Even when grocery shopping, I used to try to keep a running tab of what I was spending," he said. "When I felt like it was getting too high, I'd start making decisions on what I could put off until the next time."
House said he occasionally relied on credit cards to purchaseitems, which accrued debt when he couldn't pay off the balance. Now he has enough money to not only pay off his credit card but have plenty left over.
Christopher Stroup, who first made $100,000 in 2014, said the pay bump helped him pay off his student debt.
The 33-year-old, who's based in California, said his income also enhanced his relationships with friends and family. He can afford to regularly travel with them or dine out at restaurants with them.
"I even have an annual goal to make it to Europe at least once," he added. "None of that would be possible if I weren't earning at this level."
Additionally, Stroup started his own financial planning business: He launched it in September after leaving his job in August. He said he's had to put a lot of money into his startup, but that he'd saved enough in recent years to both invest in his business and meet everyday expenses. He said he expects to earn over $100,000 in combined income this yearfrom his prior jobas a financial advisor and his business.
The perks can come with more responsibilities
Corritta Lewis first earned a six-figure income in 2018 and said her salary has doubled over the past few years. In 2023, she earned roughly $280,000 across her consulting job and a travel blog she runs on the side.
The 35-year-old, who's based in Orlando, told BI the extra income has allowed her and her wife to travel the world, plan for early retirement, and save for their son's future.
"We both graduated with crushing student loan debt that delayed our lives, so we want to ensure he is not in that situation," she said.
However, there is a significant downside to her higher income: "lack of time," Lewis said. Rising up the pay ladder has required her to sometimes put in long hours. The end of the year tends to be a particularly busy time — she said she's recently been working between 50 and 60 hours a week.
"I do not have as much free time to spend with my family," she said, adding, "I am trading my time today to reach a specific retirement goal."
She said she hopes to be able to pivot to part-time work in a few years after growing her savings further.
Similarly, for John, a millennial based in California, making more money has come with additional responsibilities.
He first earned a six-figure income in 2018 working in the IT sector and is on track to earn roughly $250,000 this year across a full-time and part-time job, both of which are remote.
John said one of the biggest impacts of his six-figure income is that he's been able to help out his family financially.
"I pay for my mom's rent and for the majority of my sister's medical expenses," said John. His identity is known to BI, but he asked to use a pseudonym due to fears of professional repercussions.
Even with these additional expenses, John said he has enough money for himself and worries less about his finances than he did earlier in his life.
"I could afford a decent quality of life without having to look at the prices of things, he said. "Given that I don't have a college degree, this was very freeing for me."
Are you making over $100,000 a year? Are you willing to share your story and the impact this income has had on your life? If so, contact this reporter at [email protected].
President Vladimir Putin reviewing Russian troops.
Contributor/Getty Images
Russia's railway industry is in the midst of a big downturn, according to one Russian research firm.
Investment in Russia's railways is being slashed by nearly a third next year, TASS reported.
It complicates Russia's trade with China, which has relied partly on rail transport.
One of Russia's key trading channels with China is facing serious snags. That's a result of burdens stemming from Russia's war-driven economy, which have fueled a big slowdown in the nation's rail industry — a vital means of trade between Moscow and Beijing.
Russia's rail industry is in its worst slowdown since the Great Financial Crisis, with the downtrend "still going strong," according to an analysis from the Russian research firm MMI Research. Freight volume transported by Russian Railways, Russia's state-owned rail system, slumped 5% in the first 11 months of 2024 compared with the same period last year, according to MMI data cited by Bloomberg.
The slowdown is driven in part by Russia's need to ship war-related materials, which have worsened supply bottlenecks and slowed the trade of key commodities, like coal and aluminum, the outlet reported.
Investment in Russia's railroads is also being slashed, partly due to high interest rates in the nation, according to a report from the state-owned news agency TASS. Russian Railways said it would earmark just 890 billion rubles, or $8.5 billion, for its investment program next year, a 30% cut from investment in 2024, TASS reported.
The firm is mulling whether it should cut investment by another third through the end of the decade, the Russian outlet Kommersant reported. Russian Railways did not immediately respond to a request for comment from Business Insider.
The changes spell bad news for Russia's trade with China, which has leaned on railway transport amid Western sanctions. Russia poured billions into its railways earlier this year partly to accommodate its increased trade with China.
The changes also speak to the growing costs of Russia's war against Ukraine, which have produced myriad economic problems for Moscow.
Russia's central bank raised interest rates to a record 21% earlier this year in an effort to lower sky-high inflation. The bank kept interest rates level in their policy decision last week, due to concerns about "excessive cooling" in Russia's wartime economy, according to the nation's top central banker.
The offers and details on this page may have updated or changed since the time of publication. See our article on Business Insider for current information.
Dave Ramsey is a radio host and personal finance expert.
Anna Webber/Getty Images for SiriusXM
The average American expects to spend over $2,000 on holiday costs this season, one survey found.
Some respondents predicted they would be paying off the debts they accrue into May next year.
Personal finance guru Dave Ramsey advised saving before the holidays and setting a strict budget.
The most wonderful time of the year often comes with a hefty price tag — and many people expect to be paying for it into next summer.
People's debt balloons "because they don't plan for Christmas, like it sneaks up on them, like they move it or something," personal finance guru Dave Ramsey told "Fox & Friends" last week.
Ramsey's comments were in response to a survey showing that the average American will spend over $2,000 on holiday-related expenses this season, including travel, gifts, food, and clothes.
The survey of 2,000 people was conducted in early November by Talker Research and commissioned by Achieve. A fifth of respondents said they likely wouldn't recover financially until May 2025 or later.
The personal finance guru and host of "The Ramsey Show" described the $2,000 figure as "mindblowing," adding that it was a large sum to spend "all in the name of happiness comes from stuff — and it doesn't."
People can stay out of money trouble by socking away funds each month in preparation for the winter splurge, Ramsey said. They can also avoid overspending by drawing up a budget for gifts and other costs and sticking to it, he added.
"The problem with Christmas is not that we enjoy buying gifts for someone else — that's a wonderful thing," the radio personality said.
"The problem is we impulse our butts off, and we double up what we spend," he continued, pointing the finger at retailers who are "great at putting stuff in front of us that we hadn't planned to buy."
The typical US adult expects to spend $1,012 on gifts alone this holiday season, up from an estimated $975 last year, according to a Gallup survey of at least 1,000 people conducted in November.
Pinched by prices
Household budgets could be squeezed this holiday season. Inflation surged to a 40-year high of over 9% in the summer of 2022 as the cost of food, fuel, housing, and other essentials jumped, and remained above the Federal Reserve's target rate of 2% in November.
The central bank rushed to curb price growth by hiking interest rates from nearly zero to north of 5% within 18 months, sending people's monthly payments for their credit cards, car loans, and other debts skyward. Fed officials have cut rates to roughly 4% since September, but recently indicated they only expect to make two further cuts next year.
The upshot is Americans are likely to face a combination of elevated inflation and steeper rates for a while yet, setting the stage for a costly Christmas.
Elvira Nabiullina, Russia's top central banker, expressed that concern on Friday when she kept the key interest rate unchanged. Analysts polled by Reuters had expected her to hike rates to 23%.
"Our politics is aimed at prevention of extreme scenarios, which means that we cannot let the economy overheat further," Nabiullina said at a press conference following the rates decision, according to TASS state news agency.
"It is necessary to make sure that overheating subsides. That said, it is necessary to avoid excessive cooling, which is why we keep a close eye on this," she said.
Nabiullina said the central bank kept the interest rate steady as monetary conditions have "tightened even more than was implied by the key rate increase" in October, when the bank raised the rate from 19% to 21%. Russia started the year with its benchmark interest rate at 16%.
"Consequently, lending growth notably slowed down in November," she said. "We will need some time to assess how steady this deceleration in lending is and how the economy is adjusting to the new conditions."
Russian business leaders complain about high interest rates
Nabiullina's comments came as Russia's inflation hovered around 8% in the year to November, compared to the target rate of about 4%. Staples, like the price of butter and potatoes, have shot up this year. But the central bank's three straight rate hikes since June may be working, the top central banker signaled.
"Tough monetary conditions have evolved in the economy, which are to provide for inflation slowdown in coming quarters," she said, per TASS.
Russian business leaders have been complaining about the central bank's high interest rates, which they say are stifling business activities.
Sergei Chemezov, the CEO of the defense conglomerate Rostec, said in October that record-high interest rates were "eating up" the profit from the company's orders.
"If we continue to work like this, then most of our enterprises will go bankrupt," Chemezov said.
Economic cracks in Russia
Even Russian President Vladimir Putin on Thursday acknowledged that his country's economy is not in a good place — and he blamed the central bank and federal government.
The Russian leader said that the central bank could have used instruments other than interest rates to cool the economy and that the federal government could have worked with economic stakeholders to improve supply.
"There are some issues here, namely inflation, a certain overheating of the economy, and the government and the central bank are already tasked with bringing the tempo down," Putin said during his marathon annual press conference.
Price rises had been an "unpleasant and bad" outcome, he said.
Given the sweeping sanctions against Russia's economy, Nabiullina faces a challenging job to keep Russia's seemingly resilient economy going.
Economic cracks are emerging as the Kremlin focuses on shoring up its defense industry for its war in Ukraine — but at the expense of other sectors, Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center fellow wrote on Friday.
Prokopenko, a former Russian central bank official, wrote that growth momentum could stall next year, with social and fiscal challenges developing into crises around 2026.
Federal Reserve Chair Jerome Powell surprised markets on Wednesday evening.
Jacquelyn Martin/AP
The Federal Reserve cut its benchmark interest rate to between 4.25% and 4.5% on Wednesday.
The central bank also projected two cuts next year instead of four, sending stocks tumbling.
Here's how analysts, economists, and other experts reacted to the Fed decision and market reaction.
The Federal Reserve cut its benchmark interest rate on Wednesday to a range of 4.25% to 4.5%, bringing its decline since mid-September to 100 basis points.
Wall Street usually celebrates rate cuts as lowering borrowing costs drives spending, investing, and hiring. Reducing rates also signals inflation is under control, and makes risk assets like stocks relatively more attractive by trimming yields on safer assets like Treasuries.
Yet stocks tanked because Fed officials projected two cuts next year, down from four previously. Fed Chair Jerome Powell also said the central bank expects to ease its monetary policy more slowly in the months ahead.
Here's a roundup of how analysts, economists, strategists, investors, and other experts reacted to the latest Fed decision in their morning research Thursday.
Matt Britzman, senior equity analyst at Hargreaves Lansdown
"US markets played the part of Scrooge on Wednesday, tumbling as the Federal Reserve's hawkish tone dampened holiday cheer.
Investors should see this as a healthy spot of profit-taking rather than an end to the party, after what's been a fantastic run for markets since the US election."
Russ Mould, investment director at AJ Bell
"Markets are normally good at reading the signs, but the sell-off on Wall Street last night would suggest investors had started on the Christmas sherry a bit early and were caught out by the Fed's announcement about where rates might go in 2025.
The 3% drop in the S&P 500 is a wake-up call that US markets are not a one-way ticket to the moon.
The fact futures prices are showing a rebound in the main US equities on Thursday would suggest we are not at the start of a full-blown market correction. Instead, it's more likely that investors are now sitting up and paying more attention to what could go wrong, rather than only focusing on the positives. That's long overdue and a healthy development."
David Rosenberg, founder and president of Rosenberg Research
"This is a Fed that really has no faith in its view at any time and is willingly reactive as opposed to proactive even though its actions affect the economy with long lags.
You would have thought that between the commentary and forecast changes that the world has changed dramatically since the jumbo rate cut just three months ago. It clearly does not take much to cause this Fed to swing its view around. I can guarantee that it will shift again."
Stephen Koopman, senior macro strategist at Rabobank
"'We had a year-end inflation forecast, and it's kind of fallen apart.'
Not exactly the confidence-inspiring line you'd expect from a Fed chair. But Jerome Powell's performance at yesterday's press conference wasn't his finest hour. In what might have been the most uncomfortable showing of his tenure, Powell ceded the stage to the hawks, visibly strained as he tried to sell a strategy he didn't fully appear to endorse.
Powell flagged inflation 'moving sideways' and 'higher uncertainty' around its trajectory. These admissions reveal a central bank increasingly unsure of its footing, with rates markets now expecting just one cut for 2025 (as we do), and with no real consensus on when that final cut would arrive."
Jamie Cox, managing partner for Harris Financial Group
"Markets have a really bad of habit of overreacting to Fed policy moves. The Fed didn't do or say anything that deviated from what the market expected — this seems more like, I'm leaving for Christmas break, so I'll sell and start up next year.
The good news is that this 10-day sell-off should lay the path for a Santa Rally leading into next week."
Chris Zaccarelli, chief investment officer for Northlight Asset Management
"Santa came early and dropped a 25-bps rate cut in the market's stocking but accompanied it with a note saying that there would be coal next year."
The market is forward-looking and ignored the good news of today's rate cut and instead focused on the paucity of rate cuts for next year."
Jochen Stanzl, chief market analyst at CMC Markets.
"What was heard last night from the Fed as an accompaniment to the interest rate cut is a showstopper for the stock market.
The Fed is sending a clear signal that it has almost completed the phase of interest rate cuts. The year 2025 will be a significant break in the Fed's rate-cutting cycle.
The Trump blessing could quickly turn into a curse. If the market expects yields to rise further, it is unlikely that the Fed will intervene against these forces. If inflation data continues to rise in January and February, then that could be it for the interest rate cuts."
Adam Turnquist, chief technical strategist for LPL Financial
"While the Fed is taking all the heat for today's sell-off, a reality check from overbought conditions, deteriorating market breadth, and rising rates was arguably overdue.
Overall, today's FOMC meeting brought back some unwanted clouds of uncertainty over monetary policy next year. At a minimum, market expectations have shifted toward a shallower- and slower-than-anticipated rate-cutting cycle. Technically, the near-term risk remains to the upside for 10-year Treasury yields, creating a likely headwind for stocks."
Jean Boivin, head of the BlackRock Investment Institute
"The Fed has poured cold water on already dwindling market hopes for generous rate cuts in 2025.
Given the risk of resurging inflation from potential trade tariffs and a slowdown in immigration that has been cooling pressure in the labor market, market expectations of only two more cuts in 2025 now seem reasonable.
We expected this policy outcome, so it doesn't change our recently upgraded view on US equities. US stocks can still benefit from AI and other mega forces, from robust economic growth and from broad earnings growth — and we see them outperforming international peers in 2025."
Isaac Stell, investment manager at Wealth Club
"With an economy that's going gangbusters and an incoming president with a fiscally loose agenda, you wonder why the Fed felt it necessary to cut.
Is this to curry favor with the incoming administration or is there a bump in the road the Fed can see that the rest of us are missing."
Michael Brown, senior research strategist at Pepperstone
"The FOMC delivered about as hawkish a cut as they could muster up yesterday, and market participants were not particularly pleased about what they heard.
It was, though, a little perplexing to see such a violent market reaction to Powell's remarks, particularly considering how 'every man and his dog' had been expecting this sort of a pivot in the run up to the meeting.
It feels, though, as if markets have overreacted to Powell's message, and that we may have reached something of a hawkish extreme here
Consequently, I'd be a dip buyer of equities here, as strong earnings and economic growth should see the path of least resistance continuing to lead to the upside, offsetting the fading impact of the 'Fed Put.'"
The Federal Reserve is expected to cut interest rates this week by 25 basis points.
Inflation has ticked back up in recent months, and economists think the job market is still robust.
The outlook for 2025 is more uncertain while the Fed waits to see how Trump will impact the economy.
The final interest-rate decision of the year is coming this week, and it's likely to give Americans some more financial relief.
On Wednesday, the Federal Open Market Committee is expected to announce another interest-rate cut. As of Monday afternoon,CME FedWatch, which estimates interest-rate changes based on market predictions, forecasts a close to 100% chance the Federal Reserve will cut rates by 25 basis points.
Data out last week showed overall inflation has sped up. The consumer price index's year-over-year growth rate rose from 2.4% in September to 2.6% in October before climbing to 2.7% in November. Core CPI, which excludes volatile food and energy prices, has been holding steady, with a year-over-year change of 3.3% from September to November.
Jerome Powell, chair of the Fed, said at The New York Times' DealBook Conference on December 4 that "we're in a very good place with the economy," but inflation is still not quite where the central bank wants it to be.
"The labor market is better, and the downside risks appear to be less in the labor market, growth is definitely stronger than we thought, and inflation is coming a little higher," Powell said. "So the good news is that we can afford to be a little more cautious as we try to find neutral."
Slower job growth and higher unemployment may add fuel to the argument for continuing to cut, while a tighter-than-expected labor market could lead the central bank to pause while waiting to see if wage growth and inflation speed up.
"I don't think there's that much cause for concern in the labor market data that would lead to them suspending their plan to cut," Julia Pollak, the chief economist at ZipRecruiter, told Business Insider.
Pollak said the quits rate, the latest reading of which was 2.1% in October, is "consistent with a non-inflationary labor market" and that "wage growth at 4% over the year should be sustainable given current productivity growth." Cory Stahle, an economist at the Indeed Hiring Lab, said the US economy continues to add jobs above population growth and has low unemployment.
The unemployment rate increased from 4.1% to 4.2% in November. The three-month average job gain in November was around 173,000, lower than early 2024 but still strong.
"There are still many reasons to be optimistic about the labor market, but also you don't, as a Federal Reserve policymaker, you don't want to wait until things start looking bad to react to that because by then, you might be too late," Stahle said.
The interest rate outlook for 2025 is a bit more uncertain. President-elect Donald Trump has already posed broad tariff threats on key trading partners with the US, including China, Canada, and Mexico. If he implements those tariffs, consumers would likelyface higher prices on impacted goods. The Fed could respond to inflationary trade pressures by once again raising interest rates.
However, Powell has so far declined to comment on any policy changes the Fed would consider in response to Trump's tariff threats, saying during the DealBook conference that too much about what Trump might do with tariffs is unknown.
"We can't really start making policy on that at this time. That is something that lies well into the future. We have to let this play out," Powell said, emphasizing that the Fed is making decisions about what's happening in the economy now and not six months from now.
Still, some economists expect 2025 to be another strong year for the economy. Gregory Daco, the chief economist at EY, said that the US "remains on a solid growth trajectory supported by healthy employment and income growth, robust consumer spending, and strong productivity momentum that is helping tame inflationary pressures."
"We expect these positive dynamics will carry into 2025 allowing the Fed to pursue gradual, but cautious, policy recalibration," Daco said in written commentary.
Several economic experts panned New York Gov. Kathy Hochul’s "inflation refunds" she plans to distribute to qualifying New Yorkers as part of her 2025 State of the State initiative.
Last week, Hochul proposed $3 billion in direct payments to about half of the Empire State’s 19 million residents: $300 for single taxpayers making up to $150,000 per year and $500 for joint filers making twice that.
"Because of inflation, New York has generated unprecedented revenues through the sales tax — now, we're returning that cash back to middle class families," Hochul said in a statement announcing the proposal.
However, some economists and economic experts, like Andy Puzder, said the move simply "redistributes [money] to people so the people will vote for them."
"If you really wanted to help everybody, and if you have an excess of sales taxes, then you reduce the sales tax," added Puzder, the former CEO of the parent company of Hardee’s and Carl’s Jr., CKE Restaurants. "It’s not difficult math," he added.
Puzder is a lecturer on economics and a senior public policy fellow at Pepperdine University who was considered for Labor secretary in the first Trump administration.
In his work at CKE Restaurants, Puzder increased the average franchise sales volume for the then-struggling Hardee’s from $715,000 in 2001 to more than $1 million a decade later.
The U.S. economy has been in trouble because of the same types of policies forwarded by Hochul and other tax-and-spend Democrats, he said – adding that President Biden’s American Rescue Plan was what lit the fuse on nationwide inflation in the first place.
"If you reduce taxes, fewer people will also be leaving the state," he added, as New York shed another population-based House seat and electoral vote in the decennial census.
Puzder noted a few top Democrats have warned their own leaders against such "refunds" from the government, citing former President Bill Clinton’s Treasury chief Lawrence Summers cautioning the Biden administration that similar handouts in 2021 would drive up inflation.
Former Rep. Dave Brat, R-Va., an economist and currently vice provost of Liberty University in Lynchburg, cited Nobel laureate Milton Friedman’s assertion that inflation is a monetary phenomenon.
Therefore, he said, in Hochul’s case, the better fix for inflation lies not in Albany, but in Manhattan.
"Inflation has to do with how much money the Federal Reserve prints. If she wants to give people money back from the government, that’s fine – but she’s in a prominent position in New York in that the Fed has one of its chief desks there and if you want to solve inflation, you go to the Federal Reserve."
He added that $500 for a family is a "trivial, symbolic move against a massive, hidden tax," noting that with an estimated 22% real-inflation rate over the past four years, $500 in 2020 purchasing power is only worth $390.
Brat added that Democrats’ penchant for such "refunds" put Republicans at a consistent political disadvantage because the GOP essentially has to "compete against Santa Claus" handing out presents versus the right warning the public to "eat their spinach."
Economist EJ Antoni echoed some of the sentiment about the refunds being inflationary themselves, saying that what got the U.S. into inflation in the first place was too much government spending.
"So this idea that we're going to add on another government expenditure, you're essentially just creating a feedback loop," Antoni said.
"Now, that's not to say that New York State alone is going to cause inflation. Inflation comes from the federal government, because the federal government is the one that can't create money, can print money out of nothing. But at the same time, you're still talking about increasing the cost of living for New Yorkers, just in a different way," he said.
"Any additional government spending is going to have to be paid for one way or another."
Antoni added he could see such payments to the public "snowballing" into more and more payments down the line, which in turn would lead to higher taxes being needed to fund the handouts.
Antoni also said Hochul’s proposal differs from then-President Donald Trump’s COVID-era checks, because the latter came during a time people needed "money to survive" amid stay-at-home orders and various shutdowns of job sectors.
"If the issue is that we need to reduce people's cost of living, the best way to do that would just be to reduce their taxes, not have another payment by the government," he said.
Fox News Digital also reached out to the left-leaning Brookings Institution for a further diverse viewpoint on Hochul’s move.
Fox News Digital also reached out to Hochul's office for comment but did not receive a response by press time.
Small businesses are optimistic about revenue boosts in 2025, when President-elect Donald Trump will kick off his second administration, a U.S. Chamber of Commerce report obtained by Fox News Digital shows.
The latest Small Business Index report by MetLife and the U.S. Chamber of Commerce released Monday morning found that seven in 10 small businesses, at 72%, reported they anticipate their revenues to increase next year. Last year, only 65% of businesses reported they anticipated revenue to increase, the data show.
"The growing optimism among small business owners since the beginning of the year is a positive sign as we move into 2025 and potentially points to increasing opportunities in the new year," Bradd Chignoli, executive vice president and head of Regional Business & Workforce Engagement at MetLife, said in a press release provided to Fox Digital. "As more and more employers look to increase investment and staff size, it is important to take advantage of the resources available to them, such as voluntary benefits, which can help strengthen their company’s culture and help attract and retain new talent."
The Small Business Index is a collaboration between MetLife and the U.S. Chamber of Commerce that measures small business owners’ and leaders’ expectations. The survey released Monday was conducted between Oct. 7 – 21, before the election's results, and included responses from 750 small business owners and operators.
The majority of business owners, at 70%, reported that holiday shopping is vital to their overall profit, which is slightly down from 2022’s Q4 report that found 79% of business owners reported the same.
The report found that inflation woes are small business owners’ top concern – as it has been for the last two years, according to the report. This year, however, an increase of business owners reported that both the U.S. economy and their local economies are healthier than they were this time last year.
Thirty-two percent of business owners reported the U.S. economy is in better shape than 2023, up from 25% last year, and 38% reported their local economies are healthier than last year, when 30% reported the same.
The survey also found that the majority of small business owners, at 51%, reported that red tape – including licensing, certification, and permit requirements – makes it harder for them to grow their operations. While 47% of respondents reported that they spend too much time and energy on complying with regulatory requirements.
"Too many regulations cause big headaches for small businesses, even if they feel confident in their ability to comply or have the means to outsource compliance tasks," said Tom Sullivan, Vice President of Small Business Policy at the U.S. Chamber of Commerce. "This quarter’s survey shows these requirements are complex, time-consuming, and often prevent small business owners from focusing on running and growing their businesses."
About 39% of respondents reported that in the last six months alone, they have increased their time and resources on complying with regulations alone, which is up from 33% reporting the same in the last quarter. Compliance with taxes, bookkeeping, payroll and licensing ate up a "great deal or fair amount" of time for business owners, according to the report.
The overall index score for this quarter sits at 69.1, a slight dip from last quarter’s score of 71.2, which was attributed to business owners’ reporting an increase in time and resources on regulation compliance.
Small businesses have been on edge in recent years as inflation spiraled and choked spenders’ pocketbooks. Amid the highly-anticipated election cycle this year, Trump campaigned, in part, on lowering costs for Americans at check-out lines. Trump defeated Vice President Kamala Harris at the ballot box last month, securing 312 electoral votes to Harris’ 226.
"I am promising low taxes, low regulations, low energy costs, low interest rates, secure borders, low, low crime and surging incomes for citizens of every race, religion, color and creed," Trump said from the campaign trail in September. "My plan will rapidly defeat inflation, quickly bring down prices and reignite explosive economic growth."
"I took care of our economy like I would take care of my own company in every decision. I asked, will I create jobs here, or will I be sending jobs overseas? Will it make America richer and stronger, or will it make our country weaker and poorer?" Trump asked. "I always put America first every single time. And when our country was hit by the China virus, we saved the economy. We rescued tens of millions of jobs."
Trump recently signaled openness to raising the federal minimum wage, but that's likely to hit GOP resistance.
Jeff Bottari/Zuffa LLC via Getty Images
Trump said in his Person of the Year interview that lowering grocery prices is "very hard."
He said that high food prices were part of why he won the election.
Some economists think Trump's economic plans, like tariffs and deportations, will be inflationary.
President-elect Donald Trump didn't commit to being able to lower grocery prices in his Person of the Year interview with Time Magazine, after flagging the issue as an important part of his win.
Time asked Trump if failing to lower grocery prices, as he said he would do on the campaign trail, would make his presidency a failure.
"I don't think so. Look, they got them up. I'd like to bring them down. It's hard to bring things down once they're up," he said. "You know, it's very hard. But I think that they will."
Trump added that he thinks "energy" and "a better supply chain" will help bring down costs.
The economy consistently ranked as voters' top issue in the presidential election, with inflation in particular at the top of mind. Frustrated with the price of everything from eggs, to meat, to cereal, many voters said they supported Trump because they thought he would lower everyday costs.
On the campaign trail, Trump vowed to lower food prices, saying at a rally on September 23, "Vote Trump and your incomes will soar. Your net worth will skyrocket. Your energy costs and grocery prices will come tumbling down." When talking about groceries in an interview last week, he said that he would "bring those prices way down."
In the interview, Trump said that Democrats lost because of their failure to talk about the economics of voters' daily lives, like the experience of buying groceries. Some economists predict that the president-elect's plans, like mass deportations and broad tariffs, will be inflationary. Walmart, the country's biggest grocery retailer, is among the companies that said it will likely raise prices if Trump enacts his trade agenda.
When asked whether his proposed mass deportations, including for migrant agricultural workers, would spike food prices, Trump said no.
"No, because we're going to let people in, but we have to let them in legally," he said, before moving on to talk about not allowing prisoners into the country.
Inflation ticked up slightly in November, with the consumer price index rising to 2.7% from a year ago, as expected. The food-at-home index rose slightly as well, reaching 1.6% in November compared to 1.1% in October.
Representatives for Trump did not immediately respond to Business Insider's request for comment.
The consumer price index increased 2.7% from a year ago as expected, higher than October's 2.6% rate and the highest reading since July, when the rate was 2.9%.
Matt Colyar, an economist at Moody's Analytics, told Business Insider before the new data was published that an acceleration wouldn't be concerning because November's increase would likely be because of housing inflation. Shelter inflation has mainly been cooling from its peak of over 8% in March last year but is still high compared to the pre-pandemic rate.
"If inflation were to accelerate because prices for cyclical, demand-driven things like hotels, vehicles, airfare, etc. jumped, then policymakers at the Federal Reserve will start to look at the US economy with a bit more caution," Colyar said. "That shouldn't be overstated, however. It takes more than one monthly data point to be a trend and we haven't yet seen that kind of dynamic emerging."
While shelter was the biggest contributor to inflation overall, housing price growth has slowed. "The shelter index increased 4.7 percent over the last year, the smallest 12-month increase since February 2022," a Bureau of Labor Statistics news release on Wednesday said.
Members of the Federal Open Market Committee will meet once more this year next week on December 17 and 18 and will likely announce another interest-rate cut. CME FedWatch showed after the new inflation data was published traders expected a nearly 100% chance of an interest rate cut of 25 basis points next week, up from a nearly 90% chance before the report.
The CPI increased 0.3% over the month in November from October, the same as the forecast and an uptick from October's increase of 0.2%. The news release said that the rise in the shelter index over the month accounted for almost 40% of the overall increase.
Core CPI, which excludes volatile food and energy prices, increased 3.3% from a year ago as expected. That's the same year-over-year rate as in October.
The energy index fell 3.2% year over year in November after declining 4.9% in October. Gas tumbled by 8.1% in November.
The food-at-home index rose 1.6% year-over-year in November after rising 1.1% in October, and the food-away-from-home index increased 3.6% in November after rising 3.8% in October.
Cory Stahle, an economist at the Indeed Hiring Lab, told BI following the jobs report that "there are still many reasons to be optimistic about the labor market," like the layoff rate being less than the pre-pandemic low. However, Stahle added, "As a Federal Reserve policymaker, you don't want to wait until things start looking bad to react to that because then by then you might be too late."
Argentina's president, Javier Milei, has presided over sweeping spending cuts since taking office a year ago.
Tomas Cuesta/Getty Images
Javier Milei became Argentina's president a year ago, partly on a pledge to slash the state.
Elon Musk and Vivek Ramaswamy, co-heads of DOGE, have expressed admiration for Milei's policies.
While his government brought inflation down, his approaches have also triggered a recession.
When Javier Milei took office on December 10, 2023, the firebrand Argentine president inherited an economy in meltdown. Milei promised to take a "chainsaw" to the state.
Since then, he has presided over sweeping spending cuts, fired tens of thousands of public employees, shut down half the country's 18 ministries, and devalued the peso against the dollar by over 50%. He cut state spending by an estimated 31% in his first 10 months alone.
The measures caught the attention of Elon Musk and Vivek Ramaswamy, the men now charged with a similar task under President-elect Donald Trump.
Last month, Musk said Argentina had made "impressive progress,'" while Ramaswamy said that the US needed "Milei-style cuts on steroids."
Falling inflation
A year into Milei's term in office, BI took a look at the figures.
When Milei took over in December 2023, Argentina's inflation stood at 25.5%, while economic activity had fallen 4.5% year over year.
Argentina's inflation rate dropped to 2.7% this October — the lowest level in three years, according to the predicting market website Kalshi.
Ignacio Labaqui, a senior analyst at Medley Global Advisors, a leading macro policy research service, called this a "success" for Milei.
He said that Milei "managed to bring inflation down faster than expected despite starting his term with a 100% increase in the exchange rate and hiking longtime frozen utilities' tariffs — two measures that have an inflationary impact."
However, Facundo Nejamkis, director of Opina Argentina, a political consultancy firm, told Reuters that Milei's cuts have ignited a "major" recession.
Unemployment up
According to BBVA projections, Argentina's GDP contracted by 3.4% in the first half of 2024, and it is expected to decline by 4% for the full year.
The country's unemployment rate also rose to 7.6% in Q2, up from 6.2% in the same period last year, according to Argentina's statistics agency.
Maria Victoria Murillo, director of the Institute of Latin American Studies at Columbia University, told BI last month that the "deep" recession, while "very painful," has been accepted by Argentinians because inflation was "terrible" and people "do not want to go back."
Meanwhile, according to Argentina's statistics agency, the country's poverty rate rose to 52.9% in the first half of 2024, up from 41.7% in the second half of 2023.
This was the highest rate in 30 years, per a research team at the Observatory of the Argentine Social Debt, which keeps track of key economic indicators.
While acknowledging declining inflation, it said growing poverty was a result of Milei's "shock" economic plan and structural issues, including the devaluation of the peso.
Falling inflation "does not yet translate into a greater capacity for household consumption," it said.
Fiscal balance
There are, however, some signs of recovery.
In the first five months of 2024, Argentina's government achieved a primary fiscal surplus of 1.1% of GDP — its first in 12 years.
This is Milei's "most remarkable achievement," said Labaqui of Medley Global Advisors, who said the fiscal surplus, together with the exchange rate anchor, brought inflation down faster than expected.
BBVA Research, for its part, said that it expects Argentina's GDP to rebound strongly next year, from a 4% deficit in 2024 to 6% in 2025, driven by investments, exports, and private consumption.
Juan Cruz Díaz, managing director at Cefeidas Group, an international advisory firm, told BI that "one year later, it can be argued that the economic landscape has certainly improved, although there is still a long way to go."
He said that Argentina is still expected to end 2024 with an accumulated inflation of 120%, one of the highest in the world, but a sharp decline from 2023's 211%.
"In addition, Milei has promoted a regime to attract large foreign investments in certain sectors of the economy, with some initiatives already underway," he said.
Cruz Díaz added that one of the surprising aspects of the last year has been Milei's ability to "keep his public image relatively stable throughout the year, despite having implemented deep cuts in public spending, along with other measures generally considered unpopular and politically costly, such as the elimination of subsidies for energy and other essential services."
This is something that could be of particular interest to Musk and Ramaswamy, as they look at sweeping federal budget cuts in the US.
Labaqui, for his part, said keeping Argentina's current trajectory will depend on whether Milei's party performs "strongly" in next year's legislative elections.
"Inflation certainly is falling at a faster-than-anticipated pace," he said, "and there is an incipient economic rebound, but there is still a lot to do to bring the economy back on track."
President Biden on Tuesday touted that President-elect Trump will inherit the "strongest economy in modern history" when he takes office in January – even as Americans continue to struggle to afford homes and groceries from inflation.
Biden delivered remarks about his "middle-out, bottom-up" economic approach at the Brookings Institution, a public policy think tank in Washington, D.C., claiming there are "a number of quotes" from commentators describing his administration’s economy as strong.
"President Trump has received the strongest economy in modern history, which is the envy of the world," Biden said.
While inflation has eased significantly since its peak in 2022, grocery prices remain substantially higher than they did before the COVID pandemic swept the globe nearly five years ago.
According to the most recent Consumer Price Index inflation data from the Bureau of Labor Statistics, Americans are spending 22% more on groceries in comparison to when Biden took office nearly four years ago.
Voters said the economy was far and away the top issue facing the country – with 40% saying inflation was the single most important factor in their vote – followed distantly by immigration and abortion, according to the Fox News Voter Analysis of the 2024 election.
Even Trump noted during an interview with NBC News’ "Meet the Press" on Sunday that his White House victory last month came down to the economy.
Meanwhile, Biden held to his belief that Trump’s potential tariff plan is "a major mistake."
"By all accounts, the incoming administration is determined to return the country to another round of trickle-down economics and another tax cut for the very wealthy," Biden said. "That will not be paid for, or if paid for, is going to have a real cost, once again causing massive deficits or significant cuts in basic programs."
When asked in his latest interview if he could guarantee that his tariffs wouldn't force Americans to pay more for items, Trump answered, "I can’t guarantee anything."
Fox News Digital’s Paul Steinhauser contributed to this report.
"I won on the border, and I won on groceries," the president-elect said in an interview on NBC News' "Meet the Press."
Trump then drilled down on the high grocery prices that millions of Americans are paying as a key reason for his convincing White House victory over Vice President Kamala Harris.
"Very simple word, groceries. Like almost – you know, who uses the word? I started using the word – the groceries. When you buy apples, when you buy bacon, when you buy eggs, they would double and triple the price over a short period of time, and I won an election based on that," Trump emphasized in his interview, which was recorded on Friday and broadcast on Sunday.
While inflation has eased significantly since its peak in 2022, grocery prices remain substantially higher than they did before the COVID pandemic swept the globe nearly five years ago.
According to the most recent Consumer Price Index inflation data from the Bureau of Labor Statistics, Americans are dishing out 22% more for groceries in comparison to what they paid when President Biden took office nearly four years ago.
And voters' frustrations over high grocery prices, as well as other impacts from inflation, benefited Trump as he ran to win back the White House.
Voters said the economy was far and away the top issue facing the country, followed distantly by immigration and abortion, according to the Fox News Voter Analysis of the 2024 election.
And 40% said inflation was the single most important factor in their vote, and they backed Trump by almost two-to-one, according to the Fox News Voter Analysis, which was a survey of more than 110,000 voters and 18,000 nonvoters nationwide. An AP VoteCast, a survey of more than 120,000 registered voters, had similar findings.
On the presidential campaign trail, Trump railed against the Biden/Harris economy and promised to bring down prices.
"Grocery prices have skyrocketed," Trump said during an August news conference, as he stood by tables stocked with packaged foods.
"When I win, I will immediately bring prices down, starting on day one," he vowed.
And in his interview on "Meet the Press," Trump pledged that "we’re going to bring those prices way down."
But Trump, in the interview, reiterated that he would follow through on his campaign vow to levy large tariffs on imports from the nation's major trading partners.
During the presidential campaign, Harris argued that Trump's across-the-board tariffs, if implemented, would increase prices on many goods and amounted to a "a sales tax on the American people."
Tariffs are taxes that governments place on goods being imported or exported. They can raise the cost of imported products, making local products more attractive to buy.
Asked in his latest interview if he could guarantee that his tariffs wouldn't force Americans to pay more for items, Trump answered, "I can’t guarantee anything."
