Unadorned Notes: December 5-8, 2024
U.S. Job Growth Rebounds; Consumer Sentiment Hits 7-Month High; Trump Plans Immigration Overhaul; U.S. Court Upholds TikTok Ban Law; Syrian Rebels Topple Assad Regime
Economics and Business Updates
U.S. Job Growth Rebounds: The U.S. economy added 227,000 jobs in November 2024, exceeding expectations, while the unemployment rate edged up to 4.2%. Job gains were strongest in health care, leisure and hospitality, and government, though retail lost 28,000 positions. Higher borrowing costs tied to the Federal Reserve’s rate hikes have slowed overall hiring, but layoffs remain at historic lows, and job openings rebounded in October 2024. Inflation has dropped to 2.6%, down from its June 2022 peak of 9.1%, supporting consumer spending and steady economic growth at a 2.8% annual pace in Q3 2024. The Federal Reserve, encouraged by easing inflation and wage pressures, cut interest rates in September and November 2024, with another reduction expected in December 2024.1
Services Drive Growth, Manufacturing Stabilizes: The U.S. services sector, accounting for 70% of GDP, has sustained economic growth in 2024, with financial services, transportation, and leisure industries driving steady expansion. The ISM services index has consistently indicated growth, underscoring the sector’s resilience amid strong consumer demand. Meanwhile, manufacturing has faced challenges from supply chain disruptions and global uncertainties but shows signs of recovery, with ISM data reporting new orders expanding. Together, both sectors highlight a potential broad-based economic recovery.2
Consumer Sentiment Hits 7-Month High: The University of Michigan’s Consumer Sentiment Index rose to 74 in December 2024, a 3.1% increase from November 2024 and its highest level in seven months. The jump was driven by a 20% surge in the current conditions sub-index, fueled by consumers buying durable goods to avoid future price hikes. However, the expectations sub-index fell to a four-month low, reflecting growing near-term inflation concerns, with year-ahead inflation expectations rising to 2.9%. Political divisions influenced sentiment, as Republicans anticipated lower inflation under the next administration, while Democrats feared policy changes could exacerbate price pressures.3
China’s Country Garden Sales Plummet: Country Garden, one of China’s largest private developers, reported a 52.3% year-over-year drop in November 2024 contracted sales to 3.01 billion yuan, worsening its liquidity crisis. The decline outpaced the broader 6.9% sales drop among China’s top 100 real estate firms, reflecting the developer’s vulnerability due to its focus on smaller cities. Despite China’s recent property market stimulus measures, deflationary pressures and weak demand continue to weigh on residential sales. The company is negotiating a debt restructuring plan but has missed a key deadline for creditor support, raising concerns about potential liquidation.4
U.S. Politics, Policies, and Geopolitics
Trump Defends Tariff Policy: President-elect Donald Trump defended his support for tariffs, rejecting claims that they increase costs for American consumers despite widespread economic consensus. In an interview, Trump stated tariffs generated significant revenue during his presidency and argued they strengthened the economy without causing inflation. He criticized U.S. subsidies for countries like Canada and Mexico, advocating for a “fair playing field” in trade. Trump dismissed reports that tariffs cost Americans $80 billion, instead calling them a versatile tool for both economic and geopolitical leverage. He acknowledged the pandemic limited his ability to expand tariff measures during his first term.
Trump Plans Immigration Overhaul: President-elect Donald Trump reiterated his intention to end birthright citizenship, citing executive action as a possible method despite the 14th Amendment’s protections. He also expressed willingness to negotiate bipartisan solutions for Dreamers, acknowledging their contributions to U.S. society but criticizing Democrats for obstructing progress. Trump confirmed plans for mass deportations, starting with undocumented immigrants with criminal records, while promising streamlined legal immigration processes. Senator-elect Bernie Moreno emphasized immigration reform as a top priority for the administration, predicting action within the first 60 days. Trump linked immigration policy to broader political issues, framing it as central to voter concerns during the election.5
Supreme Court Reviews Transgender Law: The U.S. Supreme Court will hear arguments in U.S. v. Skrmetti, a case challenging Tennessee’s ban on gender-affirming medical treatments for minors. The federal government argues that the law violates the 14th Amendment by discriminating based on sex and transgender status, citing parallels to the Court’s Bostock v. Clayton County decision. Tennessee contends that the law focuses on medical diagnoses and does not constitute sex discrimination, warning against applying Bostock’s logic to equal protection cases. Lower courts remain divided on related issues, with the Fourth Circuit recently ruling that West Virginia’s refusal to fund certain transgender treatments violates constitutional protections. The Court’s decision could have far-reaching implications for state laws and gender-related policies nationwide.6
U.S. Court Upholds TikTok Ban Law: A federal appeals court upheld a U.S. law requiring TikTok to sever ties with its China-based parent company, ByteDance, or face a ban by January 2025. The court rejected TikTok’s claims that the law violates the First and Fifth Amendments, citing national security concerns over Chinese influence and data access. TikTok has denied these allegations, arguing the government has presented no evidence and that divestment is technically and commercially unfeasible. The company plans to appeal to the Supreme Court, while bipartisan lawmakers continue to push for the app’s U.S. ownership transition. President-elect Donald Trump is expected to influence the platform’s future, possibly supporting a resolution to keep TikTok operating under American ownership.7
Biden Promotes Lobito Rail Project: President Joe Biden met African leaders in Angola to support the Lobito Corridor project, which aims to extend a railway for exporting critical minerals from Congo and Zambia to global markets via Angola’s port of Lobito. The U.S. has provided a $550 million loan to refurbish the existing rail line, with further plans to expand into Zambia and potentially Tanzania by 2026. The initiative, seen as a counter to China’s dominance in Congo’s mining sector, is backed by Western companies and aims to boost regional trade and investment. Biden emphasized sustainable development and debt reform during meetings with leaders from Angola, Congo, and Zambia, highlighting the project’s potential to integrate African economies. Despite this effort, U.S. influence in Africa has waned under Biden, as China remains a key player in critical mineral supply chains.8
Syrian Rebels Topple Assad Regime: Syrian rebels seized Damascus, ending Bashar al-Assad’s 24-year rule and six decades of family autocracy, as Assad fled to Russia. The regime’s collapse, driven by a Turkish-backed revolt, significantly weakened Iran’s and Russia’s influence in the region and raised prospects for refugee returns. Celebrations erupted in Syria and abroad, with freed prisoners pouring out of jails and opposition flags replacing Assad’s across embassies. U.S. and Israeli officials hailed the development as a blow to Iranian and Hezbollah power, while world leaders acknowledged the challenges of stabilizing the war-ravaged country. Syria’s transitional leaders pledged free elections and the reconstruction of a nation devastated by conflict, displacement, and economic collapse.9
