US industry sectors react to Republican victory in 2024 election
What the chart shows
This chart tracks the performance of S&P 500 sectors during presidential election years, highlighting sector overperformance and underperformance relative to the index. Each year is color-coded by the political party of the elected president—blue for Democrats and red for Republicans—revealing patterns in sector performance based on political outcomes.
Behind the data
When this chart was first published on 30 August 2024, the focus was on the historical tendency of certain sectors to outperform the S&P 500 during presidential election years. It highlighted a clear correlation between sector performance and the political affiliation of the winning president, with Financials typically outperforming during Republican victories and Consumer Discretionary thriving during Democratic wins.
Since then, the 2024 election results have reinforced some of these historical trends while diverging in others. For example, Financials and Communication Services aligned with their historical patterns of outperforming during Republican years. However, Consumer Discretionary and IT, which showed mixed historical performance in similar contexts, delivered strong results in 2024, demonstrating the complexity of sector performance beyond historical norms.
US markets thrive despite recession signal
What the chart shows
This chart tracks the performance of the S&P 500 following a trigger of the Sahm Rule, which occurs when the three-month average unemployment rate rises by 0.5% or more from its prior year low. Historical data shows that such triggers have consistently preceded recessions, with the index typically experiencing turbulence initially but recovering strongly over the subsequent year. The chart visualizes median, interquartile and percentile ranges of S&P 500 performance after Sahm Rule triggers, offering insights into potential market behavior over six-month and one-year horizons.
Behind the data
When this chart was first published on 9 August 2024, the Sahm Rule had recently been triggered, and historical precedent suggested an imminent recession. At the time, the analysis indicated potential short-term downside for the S&P 500, though historical data showed recovery and growth over the longer term.
Since then, this cycle has defied historical patterns. 2024 ends without a recession, and consensus forecasts assign a low probability of one in 2025. Instead, the economy has displayed surprising resilience, with GDP growth remaining strong and the S&P 500 surging to new highs. This deviation from past trends underscores the unique dynamics of this economic cycle, driven by fiscal stimulus, sustained consumer spending and labor market flexibility.
Localized employment trends help US avoid recession in 2024
What the chart shows
This chart tracks the share of US states where the three-month average unemployment rate rose by 0.5 percentage points or more relative to its 12-month low, a measure of localized Sahm Rule triggers. The green line represents an equally weighted share of states, while the blue line reflects a labor force-weighted measure. A horizontal grey line at 31% marks the historical benchmark associated with nationwide recession onset. The chart reveals how state-level Sahm Rule triggers fluctuate significantly during economic cycles, with peaks typically coinciding with major recessions.
Behind the data
When this chart was first published on 5 April 2024, over 50% of states had triggered the Sahm Rule, exceeding the historical recession threshold of 31%. This raised concerns of an impending recession, amplified by concentrated layoffs in sectors like technology, finance and services. At the time, the broadening scope of state-level triggers suggested sector-specific vulnerabilities spilling over into wider economic risks.
Since then, the Sahm Rule was ultimately triggered in only 40% of states, far fewer than during past recessions such as 2008 or 2020. This divergence helps explain why 2024 avoided a nationwide recession. Unlike prior cycles where unemployment pressures were widespread, the 2024 triggers were concentrated in specific states and industries, reflecting localized employment dynamics rather than a broad-based downturn.
Volatile revisions to US payrolls spark shift to alternative data source
What the chart shows
This chart tracks 12-month revisions to US nonfarm payrolls for April-to-March cycles, comparing initial reported figures to revised totals. Each year is represented by a red bar for downward revisions or a green bar for upward revisions, scaled by magnitude. The blue line shows the error relative to total payroll levels, while the dotted orange line indicates the average negative revision mean. The dotted red line represents the 5th percentile Value-at-Risk (VaR), marking extreme downside scenarios for revisions.
Behind the data
When this chart was first published on 23 August 2024, US nonfarm payrolls had been revised downward by 818,000 jobs for the 12 months through March 2024, a significant reduction of 0.5%. This marked the largest downward revision since 2009, exceeding historical averages and even surpassing the 95% confidence VaR estimate of 602,000. Concerns were raised about the reliability of initial payroll figures and the broader implications for the labor market’s perceived strength.
Since then, the volatility of these revisions has further highlighted the challenges of interpreting employment data. Repeated large-scale adjustments, often exceeding hundreds of thousands of jobs, have led some macroeconomists to seek alternative data sources. For example, job opening data from the Indeed Hiring Lab – available through Macrobond – offers a more stable and reliable perspective on labor market trends, closely correlating with payroll data but exhibiting significantly less volatility.
These ongoing revisions underscore the need for caution when relying on nonfarm payrolls for real-time analysis.
China’s housing market shows signs of recovery after government stimulus
What the chart shows
This chart visualizes diffusion indices – the share of cities experiencing month-on-month price changes – for new and existing homes across 70 major cities in China. A reading of 50 indicates no change in prices, while readings above or below reflect price increases or decreases, respectively. The blue line tracks new housing, and the green line tracks existing housing.
Behind the data
When this chart was first published on 2 February 2024, the diffusion index for existing housing had just hit zero for the first time since 2014, signaling widespread price declines. The index for new housing had also reached a historic low of 10, reflecting significant stress in China’s property market.
Since then, the index for second-hand housing has hovered near zero, while the new housing index declined even further below 10. However, recent months have shown signs of a turnaround. Both diffusion indices have risen, likely spurred by the People's Bank of China’s (PBoC) easing of monetary policies, including a 30-basis point cut to the 1-year medium-term lending facility (MLF) policy rate and a 50 basis-point reduction in the interest rate on outstanding housing loans in September.
Additionally, the lifting of home purchase restrictions – first imposed in 2016 during a housing price boom – has provided further support.
Despite these encouraging signals, average housing prices in China's major cities remain at historically low levels. But the market seems poised for recovery, especially if further government stimulus measures are enacted.