US Economics Update Budget deficit projections dependent on rate outlook Although the Congressional Budget Office's (CBO) latest projections show the Federal budget deficit at only 2.6% of GDP in fiscal year 2015, it does still expect the deficit to widen again before the... 26th January 2015 · 1 min read
US Economics Update Monetary indicators Monitor (Dec. 14) The growth rates of the various measures of broad money have remained robust even after the Fed halted its large-scale asset purchases late last year. For 2014 as a whole, M3*, our estimate of the... 20th January 2015 · 1 min read
US Economics Update Drop in gasoline prices will help drive vehicle sales The drop in gasoline prices is adding to the already-favourable outlook for vehicle sales, which we expect to hit all-time highs soon. 20th January 2015 · 1 min read
US Economics Update NFIB & JOLT surveys hard to square with wage weakness The latest batch of survey data released this morning suggest that labour market conditions are even stronger than we previously believed and leaves the slowdown in wage growth looking even odder. 13th January 2015 · 1 min read
US Economics Update What would keep the Fed on hold? Despite the prospect of inflation spending most of this year below zero and the mixed news on wages, we still believe that the Fed will raise rates by June at the latest. Nonetheless, it is worth... 13th January 2015 · 1 min read
US Economics Update Temporary deflation won’t prevent rate hikes The latest fall in crude oil prices means that headline CPI inflation will drop below zero in January and could remain in negative territory for most of the year. Nevertheless, this bout of deflation... 6th January 2015 · 1 min read
US Economics Update Fed's plans for a mid-2015 lift-off may need to be accelerated The FOMC statement issued today had something for everyone but, on balance, it does not dissuade us that unexpectedly strong employment growth over the next few months could still prompt the Fed to... 17th December 2014 · 1 min read
US Economics Update Monetary Indicators Monitor (Nov.) The recent slowdown in the growth rates of the monetary aggregates should not be interpreted as a sign that economic growth will soon slow. In fact, the surge in bank lending is a clear indication... 17th December 2014 · 1 min read
US Economics Update PMIs show global economy ending 2014 on a weaker note Today’s flash manufacturing PMIs suggest that the pace of global growth has cooled a little further in recent weeks. Nonetheless, the slowdown since the summer has been milder than the tone of media... 16th December 2014 · 1 min read
US Economics Update Recovery not being driven by a new credit boom The Federal Reserve's third-quarter financial accounts help to dispel two myths about the recovery. First, the pick-up in GDP growth over the past few quarters is not being driven by a renewed boom in... 11th December 2014 · 1 min read
US Economics Update Fed should watch the NFIB not JOLTs The NFIB small business survey is more useful than the JOLTs survey since it tells us what is going to happen to labour market conditions rather than what has just happened. It suggests that payrolls... 9th December 2014 · 1 min read
US Economics Update Losing faith in the ISM surveys We are concerned that the ISM activity indices are painting a misleading picture of the strength of the economy. We’re inclined to place more faith in the Markit PMIs, which point to more realistic... 3rd December 2014 · 1 min read
US Economics Update Slump in oil price will provide a net boost to US economy The US is still a large net importer of crude oil, so the recent collapse in oil prices will provide a net boost to real economic growth of about $150bn or 0.8% of GDP. 2nd December 2014 · 1 min read
US Economics Update This holiday shopping season could be the best in nine years Regardless of what happens on Black Friday, other more useful indicators suggest that this holiday shopping season could be the best in nine years. 20th November 2014 · 1 min read
US Economics Update Is QE in Japan and Europe good or bad for the US? Although the Fed recently concluded its quantitative easing (QE), the Bank of Japan has announced an expansion in the pace of its own asset purchases and the ECB is edging closer to full-blown QE. We... 18th November 2014 · 1 min read
US Economics Update Monetary Indicators Monitor (Oct.) The growth rate of broad money has eased, as the Fed has wound down its asset purchases and expanded its reverse repo and term deposit facilities. As the Fed expands the use of those liquidity... 18th November 2014 · 1 min read
