US Economics Update Is there really such thing as a ‘jobful’ recession? While history shows that recessions can begin even while employment is still rising, the current rate of payroll employment growth is far too strong to be consistent with an economic downturn. By the... 11th August 2022 · 4 mins read
US Economics Update Rise in delinquencies not a major threat The rise in new delinquencies on consumer loans over the first half of the year mostly reflects rising interest costs. With debt levels low, real incomes on track to begin rising again amid a drop... 10th August 2022 · 2 mins read
US Economics Update What to make of the fall in participation With most workers who left during the pandemic mostly returned to the labour force by early 2022, it is little surprise that growth of the labour force has slowed. But the decline in the participation... 10th August 2022 · 2 mins read
US Economics Update Drop in productivity most likely a statistical mirage The 2.5% slump in productivity over the past year – the worst since records began in 1948 – is another illustration of the chasm that has opened up between the GDP and employment figures. The only... 9th August 2022 · 4 mins read
US Economics Update Democrats embrace fiscal tightening The Inflation Reduction Act passed by the Senate over the weekend will, despite its name, do little to rein in inflation, but the climate provisions will make a meaningful difference in efforts to... 8th August 2022 · 3 mins read
US Economics Update Labour shortages easing only gradually The sharper fall in job openings in June signals that labour demand is now beginning to ease more markedly, but with the quits rate little changed and no signs of a pick-up in layoffs, labour market... 2nd August 2022 · 3 mins read
US Economics Update Fed to shift to smaller hikes in September The Fed’s decision to raise interest rates by a further 75bp to 2.25%-2.50% takes them close to their “neutral” level. With inflation set to fall and mounting signs of economic weakness, we suspect... 27th July 2022 · 3 mins read
US Economics Update Recession Watch (Jul.) While the deterioration in the survey data and renewed inversion of the Treasury yield curve imply that the risks are rising, our composite models suggest that the economy is still more likely than... 27th July 2022 · 4 mins read
US Economics Update Monetary Indicators Monitor (May) The sharp slowdown in money growth is set to continue as the Fed’s monetary tightening ramps up, but the resilience of bank lending suggests the impact on the economy will be limited. Payrolls Drop-In... 6th July 2022 · 3 mins read
US Economics Update Easing shortages to push down core goods inflation There has been little sign that price pressures have eased yet, but the survey evidence suggests that supply shortages continue to improve. That reinforces our view that core goods inflation will fall... 29th June 2022 · 2 mins read
US Economics Update Recession Watch (Jun.) While our models suggest that recession risks are still low, the Fed’s rapid policy tightening will trigger a marked slowdown in economic growth, which means that the risks are likely to build over... 29th June 2022 · 4 mins read
US Economics Update Fed steps up tightening amid worsening inflation The Fed’s larger 75bp rate hike came as little surprise to the markets following the worse than expected May CPI data and Monday’s tip-off in the Wall Street Journal. Our view that inflation will... 15th June 2022 · 3 mins read
US Economics Update Fed to hike by 75bp this week, in race back to neutral Last Friday, we warned in our Data Response to May’s CPI report that the unexpected rise in headline inflation opened the door to a 75bp rate hike by the Fed this Wednesday. Media reports this... 14th June 2022 · 3 mins read
US Economics Update Is low household saving a serious threat? We doubt that the low saving rate represents a serious threat to the economy. But with slower employment growth likely to limit gains in income later this year, it adds to our sense that the recent... 2nd June 2022 · 2 mins read
US Economics Update Labour shortages easing in worst hit sectors While the headline job openings and quits rates remain close to record levels, below the surface there are clear signs that labour shortages are easing in the hardest-hit sectors. That provides some... 1st June 2022 · 3 mins read
US Economics Update Monetary Indicators Monitor (Apr.) Annual money growth is slowing sharply and, given rapidly rising interest rates, wealth losses and QT, that slowdown has a lot further to run. The growth rate of bank loans is accelerating, however... 31st May 2022 · 3 mins read
