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The US manufacturing cycle is gaining traction. With nearly 200 factory completions since mid-2023 and a $590 billion pipeline led by $5 billion-plus megaprojects, advanced manufacturing is set to be a durable growth engine for the US economy with positive spillovers to industrial real estate, private credit and nationwide employment, see chart below.
Sources: Bridge Investment Group, publicly available reports and press releases from Industry Select, Industry Week, Manufacturing Dive, Reuters and US Manufacturing report, Apollo Chief Economist See important disclaimers at the bottom of the page.
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According to a recent Morningstar survey, the proportion of investors who view ESG as part of their fiduciary duty has increased in most surveyed countries, with notable declines in the US and Australia, see chart below.
Sources: Morningstar (Voice-of-the-Asset-Owner-Survey-2025-Quantitative-Analysis.pdf), Apollo Chief Economist See important disclaimers at the bottom of the page.
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There is still strong growth in data center construction, but the current growth rate at 30% is lower than the 80% observed two years ago, see chart below.
Sources: US Census Bureau, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Yield levels on deposits in many fintech companies are dramatically higher than yield levels on deposits in the banking sector, see chart below. It is a fundamental imprudence in banking to finance long-horizon assets with short-term liabilities.
Sources: Revolut, Varo Bank, Adelfi, Pibank, Sofi, FitnessBank, AlumniFi, LendingClub, Current, Wealthfront, FDIC, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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House prices in Brisbane, Adelaide and Perth are up roughly 90% since 2020, see chart below. Home prices in Sydney are up “only” 40% over the same period.
Sources: Cotality Australia, Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Almost 90% of all public fixed income outstanding in the world trades at a yield below 5%, see chart below.
With inflation at 3%, the real return for investors in public fixed income is a meager 2% or less.
Sources: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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US workers contribute on average around $8,500 to their 401(k) accounts every year, and with 71% of 401(k) assets allocated to equities—and the Magnificent Seven having a weight of almost 40% in the S&P 500—the bottom line is that each worker in the US puts an estimated $2,300 into the Magnificent Seven stocks every year, see chart below.
This is passive money going into the Magnificent Seven regardless of whether their outlook is good or bad.
Note: Average salary is $60,000 and combined average contribution rate is 14.3% and 71% of 401(k) assets are allocated to equities. Source: Apollo Chief Economist See important disclaimers at the bottom of the page.
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There are three reasons why job growth is slow: 1) Lower immigration, 2) AI implementation and 3) fewer government jobs.
Specifically:
The first chart below shows that at the current level of GDP growth, nonfarm payrolls should be 263k every month.
The second chart indicates that a key reason for the slow job growth is that the growth rate in the foreign-born labor force has been significantly weaker than normal. Fewer people looking for jobs means fewer people get hired.
The third chart indicates that AI implementation is likely improving productivity.
The fourth chart shows that government job growth was artificially high in 2022, 2023 and 2024. Combined with DOGE, government job growth is now returning to more normal levels.
The bottom line is that the weak labor market is not due to weaker labor demand, but rather to weaker labor supply because of immigration, AI implementation and a normalization of job growth in the public sector.
In short, slow job growth is not the result of a slowing economy. Because if it were, then GDP, consumer spending and capex spending would also be slowing.
The conclusion is that the Fed should focus less on the slowdown in job growth and more on the ongoing uptrend in inflation, see the fifth and sixth charts.
Sources: BEA, BLS, Haver Analytics, Apollo Chief Economist 
Sources: BEA, BLS, Haver Analytics, Apollo Chief Economist 
Note: Survey from November 2024. Sources: The Impact of Generative AI on Work Productivity | St. Louis Fed, Apollo Chief Economist 
Sources: US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist 
Sources: Institute for Supply Management (ISM), US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist
Sources: Federal Reserve Bank of Dallas, Federal Reserve Bank of Kansas City, Federal Reserve Bank of New York, Federal Reserve Bank of Philadelphia, US Bureau of Economic Analysis (BEA), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The hiring rate measures the number of hires during the entire month as a percentage of total employment, and it is currently at recessionary levels, see chart below.
Similarly, the quits rate measures the number of employees who voluntarily left their jobs during a month, expressed as a percentage of total employment, and the quits rate is also low.
Combined with a declining number of job openings, rising unemployment, and slower job growth, the bottom line is that the labor market is at a standstill, where workers are not getting hired or voluntarily changing jobs.
Sources: US Bureau of Labor Statistics (BLS), Macrobond, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Looking at annualized month-over-month growth rates shows that 60% of items in the CPI basket are growing faster than 3%, see chart below. Is a second inflation mountain emerging?
Sources: BLS, Apollo Chief Economist See important disclaimers at the bottom of the page.
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