Key highlights:

• Growth in the economy remained solid in the final quarter 2024. The labour market remains healthy, including some recent strengthening in job gains.
• Growth became more narrowly based around household consumption over 2024. January retail sales data point to at least a near term slowdown in consumption growth while business and consumer surveys highlight the potential for elevated policy uncertainty to impact the economy.
• Tariffs are occurring earlier than we had pencilled in. The risk is that the increase in tariffs also ends up being greater than assumed.
• This reinforces our view that GDP growth will slow this year, leading to some labour market deterioration.
• The Fed is on hold for now. Our central forecast still sees 50bps of cuts in the second half of this year, and 50bps next year.

Find out more in NAB’s US Economic Update (28 February 2025)