The latest economic data releases this year suggest the labor market remains strong but is cooling and the consumer is resilient in the face of sticky inflation, especially on the services side of the economy. Michael Gapen says the rebound in the labor force, labor participation and net migration played a crucial role in his revised US GDP (gross domestic product) estimates where he forecasts higher economic growth in 2024 and lower growth in 2025. Much of this positive data has led the Fed to delay their first rate cut from March to June according to our US Economics team's forecast. However, equity market strengths should help keep inflation sticky, but shouldn't reverse the downward trend. Productivity enhancements from AI still aren't reflecting in the economic data and we're still a few years off until we see AI's impact.

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