U.S. Services Sector Growth in December

The U.S. services sector showed strong growth in December, indicating potential acceleration in the economy due to anticipated pro-growth policies under the incoming Trump administration. Business confidence is high, with optimism about tax cuts, deregulation, and favorable investment climate. The services sector outperformed manufacturing, which continues to struggle despite government subsidies.

U.S. Economy Growth in May

The U.S. economy showed significant growth in May, with the services sector performing well and the manufacturing sector facing challenges. Despite inflation concerns, the economy is expected to continue growing, reducing the need for rate cuts. The Federal Reserve faces pressure to maintain rates despite calls for cuts.

Inflation

The personal consumption expenditure price index for services excluding housing and energy rose at the fastest pace since March 2022, indicating high inflation in the services sector. This is a historically rare occurrence and is seen as more persistent than goods inflation. Fed officials are closely monitoring this indicator for future inflation trends.