NEW YORK (AP) — In a year full of big numbers, with strong gains for stocks and even more fantastic flights for crypto, it was one shrinking number that superseded all.
Inflation, the scourge of the global economy, moderated this year. It’s still relatively high, particularly after the many years of low inflation that everyone enjoyed before U.S. inflation topped 9% two summers ago. But it’s cooled enough to get investors looking ahead to a 2024 where interest rates may be on the way down instead of up. Globally, inflation is estimated to have come down to 6.9% from 8.7% last year.
That led to counterintuitive moments where Wall Street actually cheered weaker reports on the economy, as long as they weren’t too weak, because they kept alive the possibility of a perfect landing for the economy engineered by the Federal Reserve. The goal was for the economy to slow just enough to snuff out high inflation, but not so much that it falls into a recession.
Now, with the economy still growing and expectations rising for cuts to rates coming in 2024, investors have rushed to get ahead of the moves, which can act like steroids for all kinds of markets. U.S. stocks bounced back from their dismal 2022, which was Wall Street’s worst year since the dot-com bubble was deflating two decades earlier.
Much of Wall Street’s run was due to just a small group of stocks, but breadth was better around the world. Stock markets across the Americas, Europe and Asia all rose.
Higher interest rates left their mark, however, notably in the U.S. housing market. Sales of previously occupied U.S. homes slumped in October to their slowest pace in more than 13 years.
Here’s a look at some of the striking numbers that shaped global financial markets in 2023.
INFLATION 3.1%
The headline inflation rate at the consumer level in November in the U.S. Inflation peaked at 9.1% in June 2022. The Federal Reserve’s target level is 2%.
2.4%
Overall inflation in the European Union in November, a far cry from a peak of 10.6% in October 2022. Energy prices plunged 11.5% from the same month a year earlier. But food inflation remains stubbornly high at 6.9%.
55%
The price increase for U.S. used cars from February 2020 through the peak in January 2022. From January 2022 through this November, prices for used cars declined 11.5%.
$4
National average price per gallon of milk in November, up 25% from $3.20 just before the pandemic in February 2020.
161%
The rate of inflation in Argentina. The government has responded by slashing the country’s currency value in half, suspending public works and cutting subsidies for gas and electricity among a number of drastic measures.
GLOBAL ECONOMY
22
Consecutive months that the U.S. unemployment rate has come in below 4%, the longest streak since a 27-month run from November 1967 through January 1970. The job market held up even as the Federal Reserve tried to slow the economy to fight inflation.
67
The percentage of Americans that disapproved of President Biden’s handling of the economy in an October poll from The Associated Press-NORC Center for Public Affairs Research. That sentiment, if it persists, could hamper Biden in his expected election rematch with former president Trump.
9.4%
The estimated decline in investment in China’s property sector from January through October, according to the World Bank. Weakness in the property sector and in global demand for China’s exports, as well as high debt levels and wavering consumer confidence have weighed on the country’s economy.
Expected growth in world trade in 2023, down from 5.2% in 2022 and sixth weakest in Organization for Economic Cooperation and Development records going back to 1980. The slump reflects a slowing global economy, growing protectionism and geopolitical tensions between the U.S. and China.
MARKETS7
This small number of stocks was alone responsible for roughly two-thirds of the S&P 500’s return in 2023 through mid-December. Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla and Meta Platforms are also Wall Street’s biggest stocks.
27.3%
The year-to-date gain for Japan’s Nikkei 225 index, as of Dec. 19. It was the Nikkei’s best performance since 2013. In July, the index rose to 33,753.33, its highest level since 1990.
$43,000
Bitcoin surged past this level in December after starting the year below $16,300. It and other cryptocurrencies had tumbled last year as rising rates hit investments seen as particularly risky.
5%
The return for the largest U.S. bond mutual fund, as of Dec. 14. As recently as November, it had been on track for a third straight yearly loss. But excitement about potential cuts to rates sent bond prices soaring.
3
The combined number of days the S&P 500 rose or fell by at least 2% in 2023. The index rose 24.2% through the year, as of Dec. 19. In 2022, a down year for stocks, there were more than 40 such days.
INTEREST RATES5%
The peak for the yield on the 10-year U.S. Treasury, a level not seen since 2007. Bond yields marched higher for much of the year, then reversed sharply over the last two months. The 10-yield stood at 3.92% on Dec. 19.
7.88%
The average rate on a 60-month auto loan in August 2023, according to the Federal Reserve Bank of St. Louis. The rate was 5.27% in August 2019.
21.2%
The average credit card interest rate as of August, according to the Federal Reserve. That’s up from 16.3% in 2022 and 14.6% in 2021.
3
The number of times Federal Reserve officials expect to cut interest rates in 2024, according to recently released projections. The Fed raised rates 11 times between March 2022 and July of this year before pausing.
4%
The European Central Bank’s benchmark interest rate. Like the Fed, the ECB kept rates steady at its latest meeting. Unlike the Fed, the ECB did not signal the possibility of rates cuts next year.
HOUSING7.79%
The average rate on a 30-year mortgage on Oct. 26, according to Freddie Mac. It was the highest average rate since Nov. 11, 2000.
$2,199
The median monthly payment listed by prospective homebuyers on mortgage applications in October, a 9.3% increase from a year earlier.
67%
The share of U.S. homeowners who had a home loan with a fixed rate of 5% or less as of September.
1.15 million
The number of existing U.S. homes on the market at the end of October. That was down 5.7% from October 2022 and is roughly half the historical average going back to 1999. Sales of existing homes fell 20.2% in the first 10 months of the year.
$391,800
The median sales price of a previously occupied U.S. home in October. It was up 3.4% from the same month in 2022.
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Reporters Paul Wiseman, Chris Rugaber and Tom Krisher contributed.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
