Is the ‘Goldilocks Economy’ Back? US Growth and Inflation Offer Hope

US economic indicators are pointing to a potential return of the ‘Goldilocks economy,’ characterized by moderate growth and low inflation. The Dow Jones Industrial Average is hitting record highs, and the tech-heavy Nasdaq 100 has rebounded, though slightly hindered by Nvidia’s mixed earnings report. Inflation is stabilizing, and consumer spending remains strong. A revised second-quarter GDP report indicates a 3% growth, exceeding expectations. These positive signals have pushed back on expectations of a larger interest rate cut by the Federal Reserve, with the market now pricing in a smaller reduction. However, the strength of the US labor market remains uncertain, making the upcoming Nonfarm Payrolls report crucial for gauging the Fed’s future decisions. Alongside the NFP, other key economic data releases like the ISM indexes, ADP report, and JOLTS survey will offer further insights. For Europe, the PMI indices are key, alongside retail sales and Eurozone GDP figures.