US Economics Update Powell suggests first rate cut more likely to be May Based on the surprisingly explicit steer provided by Fed Chair Jerome Powell halfway through today’s press conference, we now expect the first Fed rate cut to come at the early-May FOMC meeting rather... 31st January 2024 · 3 mins read
US Economics Update JOLTS data suggest disinflation will continue The December JOLTS data show a continued painless normalisation in the labour market – with job openings on a downward trend, layoffs unusually low and wage growth set for a sharp slowdown. 30th January 2024 · 2 mins read
US Economics Update Is the worst behind us for business bankruptcies? The surge in Chapter 11 business bankruptcy filings last quarter is not as bad as it looks, as many of them related to the WeWork failure. Excluding those, bankruptcies trended lower at the end of... 10th January 2024 · 2 mins read
US Economics Update State & local government spending boom set to end The surge in spending by state & local governments has boosted economic growth over the past year but, with tax revenues falling back in recent quarters, that boom is now set to fade. 9th January 2024 · 3 mins read
US Economics Update JOLTS data point to slower wage growth The further decline in job openings to 8.79 million in November, from 8.85 million, was a bit gloomier than expected given that the JOLTS measure had previously dropped below the level implied by the... 3rd January 2024 · 2 mins read
US Economics Update Risks to our 2024 outlook There is considerable uncertainty surrounding our forecast that GDP will increase by 1.2% next year, but we have a relatively high conviction in our call that core PCE inflation will be very close to... 18th December 2023 · 6 mins read
US Economics Update Fed's intransigence typical ahead of a turning point The Fed’s reluctance to acknowledge that it will need to begin cutting its policy rate soon – to prevent a run-up in real rates – was predictable enough based on its intransigence ahead of previous... 13th December 2023 · 3 mins read
US Economics Update JOLTS data show growing labour market slack November JOLTS data suggest that labour market slack is growing, even as payroll growth remains relatively resilient. With signs pointing to a sharper fall in wage growth ahead, the Fed can be... 5th December 2023 · 2 mins read
Global Economics Update Key risks for 2024 In this Global Economics Update, we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary... 30th November 2023 · 6 mins read
US Economics Update What explains the resilience of consumption? We are doubtful that the recent strength of consumption is because real incomes are being understated, as some have suggested. It is more likely that so-called “excess savings” were previously... 20th November 2023 · 5 mins read
US Economics Update Business investment to stagnate Business investment had so far been resilient to higher interest rates, but growth stalled in the third quarter and there are three reasons why we think that’s a sign of things to come. 8th November 2023 · 3 mins read
US Economics Update Still plenty of scope for ‘supercore’ inflation to fall The recent stickiness of the Fed’s preferred measure of ‘supercore’ inflation mainly reflects temporary factors rather than ongoing tightness in the labour market. The upshot is that we still expect a... 7th November 2023 · 5 mins read
US Economics Update Credit conditions ease following post-SVB squeeze The Fed’s latest Senior Loan Officer Opinion Survey suggests that, while they remain tight, credit conditions have eased a little since the run of regional bank failures earlier this year prompted the... 6th November 2023 · 2 mins read
US Economics Update A corollary to the Sahm rule With the unemployment rate rising, the Sahm rule will probably be triggered soon. That will prompt claims a recession has started but, since that rise is due to increased labour supply as much as it... 6th November 2023 · 2 mins read
US Economics Update Fed’s focus will shift to rate cuts before long By leaving rates unchanged while continuing to flag the possibility of further tightening to come, the Fed indicated today that it remains in ‘wait and see’ mode. But Chair Jerome Powell appeared to... 1st November 2023 · 3 mins read
US Economics Update Sharper fall in wage growth still on the cards The September JOLTS data suggest that the labour market is loosening at a slightly slower pace, but still point to a sharper fall in wage growth ahead. There is little support for the idea that... 1st November 2023 · 2 mins read