Chart of the week: US economy continues to surprise

31 January 2024

Data-driven insights and analysis from our investment team every week.  


One of the features of last year was the much better performance of the US economy. This is captured in our chart below, the Citigroup US Economic Surprise Index, which measures actual economic data against forecast. If the line is above zero, then the economy is performing better than expected.

As you can see, from about March 2023 the US economy started beating forecasts, a trend that continued throughout the year. The margin declined as forecasts were increased and had almost reached zero by the end of the year.

The expectation is that there will be a significant slowing in the economic growth rate in the US as fiscal policy tightens and consumers draw down less from accumulated savings. However, since the start of 2024 the Surprise Index has started moving up again putting us on guard about this cautious outlook for the US economy. Should this continue, our nervousness about profit growth maybe misplaced. 


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