There are fears of inflation, but the numbers for the Augusta Leading Economic Index seem to be heading in the right direction.
The Augusta Leading Economic Index (LEI) ended the year 1.8 percent higher than in December 2024.
Because of the government shutdown in the fall, the release of data for November and December was delayed until last week for some components of the LEI. Specifically, new privately owned housing units authorized increased in November and December by 21% and 17% respectively, although the total number of permits for 2025 was below the level achieved in 2024.
Initial claims for unemployment insurance decreased in November but returned to October levels in December. The inflation rate in the South Census region was below the national average in November and December, standing at 2.2% each month. The Dow Jones Industrial Average (DJIA), a measure of the future profits of firms, finished the year strong at a record level. The DJIA is highly correlated with the stock price of a basket of local firms.
Job openings fell dramatically in November, down 19 percent, but recovered a little in provisional data for December. However, this provisional data is often revised downwards as new information is gathered. For example, November data was revised down by 37,000 job openings in Georgia and 8,000 in South Carolina. The number of unemployed persons in South Carolina now exceeds the number of job openings for the first time since September 2020.
Overall, the Augusta LEI indicates that general inflation is returning to normal levels, but there is still some weakness in the labor market, with job openings decreasing and initial claims for unemployment insurance increasing in 2024. This is the same story as we are seeing at the national level.
