Where we are in the business cycle: August 2024 – Cait Dourney

With inflation still above target, and continued evidence of a restrictive labour market, the economy appears to be in a late cycle pattern. Today's guest, however, points out the mid-cycle dynamics that have emerged, leading to broader economic growth globally. Joining us today for a look at the health of the global business cycle, and how it may shape investment decisions in the months ahead, is Fidelity US Asset Allocation Research Analyst Cait Dourney. Cait explains that the US is still in an expansion phase, supported by strong corporate and consumer sectors, with mid-cycle dynamics like profit margin growth. The large-scale stimulus has prevented typical late-cycle excesses, keeping private sector debt low and supporting continued growth. Profit margins and credit conditions are also improving, and the labor market is normalizing, reducing recession risks. Cait and host Pamela Ritchie also touch on international earnings revisions outpacing the US, inflation vs recession concerns, a potential Fed policy easing, and the benefits that rate cuts could have on the Canadian economy. 

 

Recorded on August 29, 2024.

 

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