US Economics Update Fed running out of reasons not to hike rates With the unemployment rate now within a whisker of most estimates of the natural rate and more comprehensive measures of wage growth showing a clear acceleration, we believe that the markets are too... 12th November 2014 · 1 min read
US Economics Update Conditions in place for consumption growth to accelerate Even though consumption growth lost momentum at the end of the third quarter, the conditions for stronger growth are falling into place ahead of the crucial holiday shopping season. 6th November 2014 · 1 min read
US Economics Update Midterms don’t alter the economic landscape Although the midterm elections have tipped the balance of political power towards the Republicans and could kick start progress on some trade and energy policies, they don’t alter the economic... 5th November 2014 · 1 min read
US Economics Update Banks still easing credit conditions despite end of QE3 The Fed's latest Senior Loan Officer Survey indicates that commercial banks are making it easier for households and smaller businesses to obtain credit, suggesting that the Fed's QE taper has had no... 3rd November 2014 · 1 min read
US Economics Update Q3 GDP growth treat included a seasonal adjustment trick The reported leap in third-quarter defence spending, which added 0.7 percentage points to annualised GDP growth was, as far as we can tell, largely due to a failure of the BEA’s seasonal adjustment... 31st October 2014 · 1 min read
US Economics Update Faster wage growth could prompt Fed to hike rates The survey-based and anecdotal evidence has been pointing to a sharp acceleration in wage growth for some time, yet the growth rate of the monthly average hourly earnings measure has remained... 31st October 2014 · 1 min read
US Economics Update Fed halts QE3 and takes slightly more hawkish stance As expected, the Fed today announced an end to its third round of large-scale asset purchases (aka QE3). Slightly less expected, however, is that despite the recent market volatility, the statement... 29th October 2014 · 1 min read
US Economics Update Revising down our core inflation forecasts The indirect impact on core inflation from the recent fall in energy prices is one more reason why coreinflation won’t increase as fast as we previously expected. Nonetheless, we still think that both... 29th October 2014 · 1 min read
US Economics Update Monetary Indicators (Sep.) The tapering of the Fed's monthly asset purchases might finally be having a knock-on impact on the growth rates of the broader monetary aggregates. Our estimate of the broadest M3 measure shows that... 21st October 2014 · 1 min read
US Economics Update Fed shouldn’t respond to lower inflation expectations Since the recent fall in US inflation expectations is solely being driven by the decline in oil prices, it won’t prevent the Fed from ending QE3 or raising interest rates next year. 20th October 2014 · 1 min read
US Economics Update Market moves hard to square with solid economic fundamentals The growing sense of market panic evident in the sharp declines in equity prices and the strong rally in US Treasury bonds over the past week is hard to square with the solid outlook for US economic... 15th October 2014 · 1 min read
US Economics Update Small businesses struggle in September As it is consistent with slower investment growth, lower inflation and a rise in the unemployment rate, the NFIB’s latest survey of small firms bolsters the case of the doves at the Fed. 14th October 2014 · 1 min read
US Economics Update More signs of labour market strength The fall in part-time employment is one more positive trend to emerge from September’s Employment Report. And more recent releases provide further signs that the labour market is improving rapidly. 7th October 2014 · 1 min read
US Economics Update iPhone 6 release won’t be a plus for the economy While the new iPhone release may have some effect on forthcoming consumption and import data, it won’t have any notable effect on GDP. Nonetheless, the outlook for consumption remains positive. 1st October 2014 · 1 min read
US Economics Update Monetary Indicators Monitor (Aug.) Even as the Fed has reduced the pace of its monthly asset purchases, the annual rate of broad money growth has remained largely stable at close to 6%. 22nd September 2014 · 1 min read
US Economics Update Other developments offset stronger dollar Even though the dollar has recently risen to a four-year high, other developments mean that overall financial conditions are supporting the economy by more than they were earlier in the year. As such... 18th September 2014 · 1 min read
