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While real personal incomes are rising, we are watching the recent muted growth trend, particularly given recent upside pricing risks. Closely monitor energy price volatility and its potential impact on near-term costs and consumer purchasing power.
The macroeconomic and financial risk of higher oil prices is less in the increase itself and more in the broader context of softening growth in real personal income, which limits consumers’ ability to absorb rising energy costs. Our analysis of prior instances where oil prices jumped more than 20% over a five-day period suggests that the primary negative impact on financial markets is isolated to the near term.
ITR Economics Long-Term View
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2027 GDP GROWTH; MANUF. FLAT |
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