US Economics Update Q3 GDP growth has downside risk Even though our 1.3% estimate for annualised third-quarter GDP growth is already well below the consensus forecast of 1.8%, we're a little concerned that growth could turn out to be even weaker... 24th October 2012 · 1 min read
US Economics Update US banks cut their exposure to German banks New figures show that US banks have not just continued to reduce their exposure to those euro-zone nations most in trouble, but they have also started to trim their exposure to German banks. This... 22nd October 2012 · 1 min read
US Economics Update US economy developing split personality The US economy appears to be developing a split personality. Households, seemingly oblivious to the scheduled jump in marginal tax rates that will reduce their after-tax income next year, are... 17th October 2012 · 1 min read
US Economics Update Monetary Indicators Monitor (Sep.) While the annual growth rates of the slightly narrower M1 and M2 monetary aggregates have slowed in recent months, the growth rate of our broader M3 measure has accelerated. Moreover, there is a good... 16th October 2012 · 1 min read
US Economics Update US economic growth may be far from over In a new academic paper, Robert Gordon speculates that per capita economic growth in the US could permanently stagnate, as fading innovation is compounded by headwinds from demography, education... 11th October 2012 · 1 min read
US Economics Update Seasonal problems with the U6 unemployment rate Jack Welch's tweet wasn't the only piece of nonsense written last week about the reported decline in the unemployment rate to 7.8% in September. The decline in the standard measure was questioned by... 10th October 2012 · 1 min read
US Economics Update Leading indicators of unemployment rate provide little hope The indicators that provide some steer of where the unemployment rate is heading over the next few months supply little evidence that it will dip below 8%. What’s more, we doubt that GDP growth will... 3rd October 2012 · 1 min read
US Economics Update How has the Fed's reaction function changed? The Fed's decision to restart its large-scale asset purchases, this time with an open-ended agency MBS programme, is part of what could potentially be a much wider shift in the monetary policy... 26th September 2012 · 1 min read
US Economics Update Fed‘s purchases of MBS may have limits QE3 could eventually leave the Fed holding nearly 30% of all mortgage-backed securities, making it a bigger player in the market than either banks or mutual funds. This suggests that, unless economic... 25th September 2012 · 1 min read
US Economics Update Businesses are not hoarding more cash It is encouraging that, faced with the prospect of the US economy hitting the fiscal cliff at the end of the year, businesses have not started to hoard more cash. At the same time, though, there is... 24th September 2012 · 1 min read
US Economics Update QE3 may dwarf other central bank policies The sheer size of the Fed’s QE3 policy becomes even more apparent when it is compared to the policies of other central banks. Although we doubt that QE3 will set the US economy alight, the greater... 20th September 2012 · 1 min read
US Economics Update Monetary Indicators Monitor (Aug. 12) The annual growth rates of the various broad money aggregates have slowed recently, but they will accelerate again as the Fed restarts its quantitative easing, this time purchasing $40bn of mortgage... 17th September 2012 · 1 min read
US Economics Update Fed launches open-ended QE3 The Fed today announced an open-ended QE3 focused on MBS purchases and extended its conditional commitment to leave its policy rate at near-zero through mid-2015. There were numerous other tweaks to... 14th September 2012 · 1 min read
US Economics Update Nominal GDP targeting remains a distant prospect Professor Michael Woodford's recent academic paper presented at the Fed's Jackson Hole conference is still making waves, not surprisingly given his conclusions that quantitative easing doesn't work... 12th September 2012 · 1 min read
US Economics Update Don't fret about prospect of lower US credit rating Today’s announcement by Moody’s that it will probably strip America of its AAA credit rating is not “new news” and shouldn’t cause any major waves in the bond market. The US fiscal position has been... 11th September 2012 · 1 min read
US Economics Update Small businesses boost hiring plans The modest rebound in the NFIB small business optimism index to a three-month high of 92.9 in August, from 91.2, is encouraging, but the index is still well below its pre-recession level, suggesting... 11th September 2012 · 1 min read
