Cast your mind all the way back to the simpler times of January 1, 2024, when your New Year’s resolutions were intact, doors weren’t falling off Boeings, and Bill Belichick was still head coach of the New England Patriots instead of the UNC Tarheels.

Fresh off a New Year's Eve high, economists were optimistic. 2023 wasn’t a particularly bad one for the US economy—after raising interest rates seven times in 2022, the Federal Reserve eased off the gas pedal in 2023 and only raised rates four times.

But hopes were high that 2024 would bring interest rate cuts—something markets had long been praying for. The thought was that the war against inflation had finally been won, and even if a soft landing was still out of sight, the Fed would no longer need to raise interest rates any more—which would allow the US economy and the stock market to run hotter.

In fact, analysts were so optimistic that they predicted the Fed would cut rates six times this year. They turned out to only be half right—we got three cuts in 2024, though to be fair, that first one in September was double the size of an average cut.

We don’t need no stinkin’ cuts

In spite of the unforeseen delay for rate cuts, the US economy proved to be shockingly resilient. In fact, the US outperformed on nearly every major metric.

Inflation as measured by CPI sits at 2.7% as of the end of November (we won’t get December’s numbers until January). That’s still above the Fed’s 2% goal, though down from 3.2% at the same time last year, and well below the high of 9.1% in June 2022.

Consumer spending has been incredibly strong this year, in spite of high prices for goods and services thanks to inflation. Spending rose 3.7% year over year in the third quarter, and considering the record holiday shopping season, it’ll likely continue to rise.

GDP beat expectations by a long shot, thanks in no small part to an American consumer who just won’t quit. GDP is on pace to rise over 2.5% this year, and though that’s down from last year’s 3.1% growth, it’s well above January 2024 consensus estimates of a measly 1% increase, according to Goldman Sachs.

The labor market hit a speed bump this summer, when a shockingly bad jobs report sent markets spiraling and investors into a tizzy. Thankfully, that appears to have been a short-term hiccup that only briefly interrupted a year of unprecedented employment. December data puts the unemployment rate at 4.2%, well below the historical average.

There is one part of the economy that still desperately needs work: the housing market. Many Americans remain locked out of an extremely expensive housing market, and forecasts from Redfin and Realtor.com show that it isn’t going to get easier to buy a house anytime soon.

The year isn’t over quite yet, but it’s safe to say that the US economy has had a strong 2024 overall.—MR

🟢 What’s up

• Carnival Corp. cruised 6.43% higher thanks to impressive earnings and forecasts of strong demand in the coming year.
• Mission Produce soared 17.29% after the avocado producer crushed earnings expectations.
• Occidental Petroleum, Verisign, and Sirius XM all got a Buffett bump after Berkshire Hathaway filings revealed the Oracle of Omaha increased his position in each company. Occidental rose 3.90%, Verisign rose 2.79%, and Sirius XM rose 12.15%.
• BlackBerry may have cut its fiscal guidance, but shares still surged 23.83% after the phone company beat Wall street’s expectations thanks to the sale of its AI cybersecurity platform Cylance.

What’s down

• Novo Nordisk plummeted 17.83% after trial results for its new weight-loss drug CagriSema failed to impress. Shares of rival stocks Eli Lilly and Dexcom popped 1.35% and 5.57%, respectively.
• Nike may have beaten Wall Street’s expectations last quarter, but the stock still stumbled 0.21% today as shareholders wonder when the turnaround will arrive.
• Trump Media & Technology Group fell 1.98% after regulatory filings revealed that the president-elect transferred his entire stake in the company to a revocable trust—meaning Trump now indirectly owns the social media company.
• US Steel really needs that acquisition: Shares dropped 5.04% after the steelmaker missed Wall Street’s expectations last quarter.

Picture yourself one year from now: Are you working the same job? Has global inflation finally deflated? Did you finally get a more flattering haircut?

We can’t say for certain whether you’ll be promoted or if Jerome Powell will still be in charge of the Fed in 2025. But economists can give us a hint of how some of the biggest economic questions may be answered over the next year.

The big picture: “Our 2025 baseline projection looks for moderating but strong global growth,” explained JP Morgan Head of Global Research Hussein Malik in the firm’s 2025 outlook note. “The backdrop of policy uncertainty, combined with geopolitical risks, however, suggests increased macroeconomic volatility and a wider range of potential outcomes.”

• Inflation: “While the pieces are in place for inflation to close most of the remaining gap in 2025, we expect an escalation in tariff policy to delay the return to 2.0%,” wrote Chief Economist at Goldman Sachs Jan Hatzius in a note.
• The Fed: “In our base case, we believe that central banks are poised to cut interest rates further in the year ahead and that returns on cash will fall,” UBS analysts wrote in a year-end preview. Jeffrey Roach, chief economist at LPL Financial, agrees, though he warns that the Fed will proceed with caution. “The strength of wealthier consumers may keep inflation somewhat sticky, suggesting the Fed will be less aggressive with rate cuts than the markets anticipate.”
• Housing market: The median asking price for a home will increase about 4%, according to Redfin. “Prices will rise at a pace similar to that of the second half of 2024 because we don’t expect there to be enough new inventory to meet demand,” wrote Daryl Fairweather, chief economist at Redfin.
• Consumer spending: “Anticipate some easing in consumer spending and a continued drift higher in unemployment,” Roach wrote.
• The dollar: “We expect the dollar to find support from potential further US tariffs against China and possibly other countries,” wrote Wells Fargo analysts in the firm’s 2025 outlook report.
• Jobs: “The labor market is also showing signs of cooling, with the unemployment rate likely to remain relatively low but rise moderately in the coming quarters,” wrote Roach.

Economists are hopeful that a strong 2024 will bring moderate economic growth in 2025. But if there’s one thing this year has shown us it’s that, when it comes to the economy, expect the unexpected.—LB

• The Consumer Financial Protection Bureau sued the parent company of payment network Zelle and the three big banks that underpin it: JPMorgan, Bank of America, and Wells Fargo. Ironically, shares of all three companies rose today.
• The FIFA Women’s World Cup is coming to Netflix in 2027 and 2031.
• Starbucks baristas are on strike at three locations, and the Starbucks Workers United union has plans for the work stoppage to grow.
• Over in Europe, Volkswagen workers ended their strike after management agreed to protect their jobs through 2030.
• What will the wild world of meme stocks bring in 2025?
• Say it ain’t so: Hailey Welch, aka the Hawk Tuah girl, is being sued after her memecoin turned out to (allegedly) be a complete fraud.

That just about does it for us in 2024. The Morning Brew crew is taking a well-deserved break for the holidays next week, but don’t worry: Brew Markets will still arrive in your inbox every afternoon except on Christmas and New Year’s.

We’ve prepped a series of special editions to wrap up the year and to look ahead at what 2025 will bring. Today’s edition was the first in our series of recaps & previews, but we’ll also be taking a look at the top commodities, cryptocurrencies, and of course, stocks of 2024—and revealing which investments the pros think will see the biggest gains in 2025.

From all of us to all of you, we’re deeply grateful to each and every one of you for giving us a bit of your time every afternoon. It’s crazy to think that we’ve only been doing this for a few months, and we owe our success to our vibrant, inquisitive, and engaged readers. We love what we do, but it wouldn’t be half as much fun if it wasn’t for all of you.

We hope you all have a happy holiday season, and we look forward to seeing you in 2025.—MR, LB, and the Brew Markets team