US Economics Update Monetary Indicators Monitor (May) Broad money growth accelerated to a decade high in May, as past increases in interest rates boosted portfolio demand, but the more recent renewed slump in rates will trigger a slowdown in the second... 3rd July 2019 · 3 mins read
US Economics Update Solid fundamentals will prevent consumer meltdown With the economic slowdown feeding through to weaker job gains, the apparent surge in consumption growth in the second quarter will not be sustained. But the strength of households’ balance sheets and... 1st July 2019 · 3 mins read
US Economics Update Fed breaks new ground forecasting rate cuts The Fed is now leaning towards lower interest rates later this year, but we still believe that the first rate cut will be delayed until September, with another 25bp reduction coming in December and... 19th June 2019 · 1 min read
US Economics Update Mexico tariffs pose significant risk for the autos sector The impact on prices of a 25% tariff on Mexican imports would be partly offset by a sharp drop in the peso. But the potential disruption to the motor vehicle industry, which relies on a continued flow... 7th June 2019 · 1 min read
US Economics Update Factoring the escalating trade war into our forecasts We are now incorporating a further escalation in the trade war with China into our global forecasts. We think that will knock a few tenths off annual US GDP growth this year and next. Core PCE... 6th June 2019 · 1 min read
US Economics Update US importers switching suppliers to avoid tariffs In response to the tariffs imposed on China, US importers are switching to alternative suppliers in Asia, which could explain why custom duties revenues have fallen back in the past couple of months... 3rd June 2019 · 1 min read
US Economics Update Trump tariffs pose a growing threat to the outlook President Donald Trump’s shock announcement of tariffs on Mexican imports could be challenged by Congress, but the possibility that both Mexican and Chinese imports might be subject to a blanket 25%... 31st May 2019 · 1 min read
US Economics Update Next round of tariffs to have a more significant impact The latest escalation in trade tensions could become a bigger drag on the US economy than previous rounds of tariffs. A 25% tariff on all imports from China would be equivalent to a tax worth 0.6% of... 21st May 2019 · 1 min read
US Economics Update Surge in productivity growth a key upside risk The acceleration in productivity growth suggests the economy’s supply side is responding to the tightness of labour markets and the tax cuts introduced early last year. With investment growth slowing... 2nd May 2019 · 1 min read
US Economics Update GDP growth still set to slow Neither the unexpectedly strong 3.2% gain in first-quarter GDP nor the outsized 0.7% m/m increase in real consumption in March changes our view that the US economy will experience a marked slowdown in... 2nd May 2019 · 1 min read
US Economics Update Fed downplays drop off in core inflation Although the FOMC left the target for the fed funds rate unchanged at between 2.25% and 2.50% today, as expected, it unveiled a slightly unexpected 5bp cut in the interest on excess reserves (IOER)... 1st May 2019 · 1 min read
US Economics Update What explains the plunge in core inflation? In contrast to the sudden weakness in core inflation a few years ago, the latest plunge in core PCE inflation cannot be explained by idiosyncratic factors. Instead, it reflects a moderation in unit... 1st May 2019 · 1 min read
US Economics Update Low level of jobless claims too good to be true We are sceptical that the decline in initial jobless claims to a 50-year low is providing a reliable guide to current labour market conditions. In recent years, a number of states have made it more... 17th April 2019 · 1 min read
US Economics Update Inventories to weigh on GDP growth later this year A surge in business inventories appears to have boosted first-quarter GDP, but the now elevated inventory-to-sales ratio suggests that inventories will be a drag over the remainder of this year, which... 16th April 2019 · 1 min read
US Economics Update Lower rates won’t prevent economic slowdown The sustained drop in Treasury yields since early November is one reason why we have upgraded our economic forecasts for 2020, but we do not think that will be enough to prevent economic growth... 12th April 2019 · 1 min read
US Economics Update Surveys add to evidence of labour market slowdown The latest NFIB and JOLT surveys suggest that investment growth is set to slow and provide further evidence that labour market conditions are no longer tightening. 9th April 2019 · 1 min read
