Today's Scoop:

Hey friends, it's almost Friday. Get ready for some big updates from Share Scoops next week.

Here's what you need to know today...

1. The economy grew more slowly over the holidays.

2. Inflation is sticking around.

3. Layoffs are still low.

S&P 500: 4,012.321Mo: -1% | 1Yr: -6% | 5Yr: +49%

The market drifted upwards today with more mixed data. Investors are worried the economy is still too strong and overheating will lead to more inflation.

Despite all the headlines about big companies cutting staff, layoffs are still broadly low. The Labor Department reported weekly initial unemployment claims fell to 192,000 last week, in-line with pre-pandemic averages. Employment is high, and companies need more workers than there are available.

The economy slowed a bit over the holidays. The Commerce Department reported U.S. real GDP grew at a 2.7% annualized rate in the fourth quarter, below the 3.2% of the third quarter. [🤓] More consumer and government spending expanded production.

Living costs kept rising quickly over the holidays. Economic policymakers' preferred inflation gauge, the core PCE index, rose at an annual rate of 4.3% in the fourth quarter.

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Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is how we track how much stuff the economy is producing. The actual number (~$26 trillion) doesn't matter as much as the direction and magnitude.

We track the growth rate of real GDP (inflation-adjusted) to know whether the economy is expanding or contracting from the previous quarter. The reporting style can be a bit confusing. The main number you hear will be an annualized growth rate (+2.7%), representing how much the GDP would increase/decrease if it hypothetically grew at that rate for an entire year. It's different from how much our production increased/decreased quarter-to-quarter (+0.6%) and not representative of the growth/decline over the past year (+0.9%).

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