US Economics Weekly Could we see a US rate hike this year? The markets will be watching for any signs of a shift in tone in Fed Chairman Ben Bernanke's semi-annual testimony to Congress this week. Despite signs that the economic recovery is gathering momentum... 28th February 2011 · 1 min read
US Economics Weekly A consumption storm For the first time in a year, real consumption probably declined in January. Last month's unusually heavy snowfalls may be partly to blame. But the bad weather probably only exacerbated the slowing... 21st February 2011 · 1 min read
US Economics Weekly Unemployment rate lowered by labour force exodus The decline in the unemployment rate doesn't just reflect an improving job market, it is also equally due to a decline in the labour force participation rate. There are roughly one million people who... 14th February 2011 · 1 min read
US Economics Weekly Higher food prices eat into payroll tax cut In light of recent increases in oil and agricultural commodity prices, we now expect CPI inflation to peak at 2.5% this summer, up from our previous forecast of 2.0%. But this is unlikely to sway the... 7th February 2011 · 1 min read
US Economics Weekly Fiscal outlook continues to deteriorate The latest Federal budget projections from the non-partisan Congressional Budget Office underline the terrible state of the public finances. This year's deficit is now expected to reach $1,480bn, or 9... 31st January 2011 · 1 min read
US Economics Weekly Economy still years from recovering "lost" output This week's release of GDP for the fourth quarter will confirm that the real economy has finally returned to the size it was before the recession struck. But it will be some years yet before the US... 24th January 2011 · 1 min read
US Economics Weekly Are small businesses missing the recovery? The unexpected dip in the NFIB gauge of small business optimism in December has reignited fears that smaller firms are missing out on the recovery. As we have pointed out before, however, the NFIB... 17th January 2011 · 1 min read
US Economics Weekly Is consumption still as sensitive to house prices? The second downward leg in house prices, which began last year, is likely to have a smaller impact on consumer spending than the initial plunge both in proportionate and absolute terms. Nonetheless... 10th January 2011 · 1 min read
US Economics Weekly Downside risks stem mainly from crippling debt In the last US Weekly of the year we want to flag up the main risks surrounding our new forecast that GDP will grow by 3.0% in 2011, before slowing to 2.0% in 2012. The main upside risk is that we are... 27th December 2010 · 1 min read
US Economics Weekly How far will the fiscal stimulus boost growth? The recent run of stronger economic data has prompted us to raise our fourth-quarter GDP growth forecast to 4% annualised, from 2.5%. Based on the higher starting point for GDP going into next year... 20th December 2010 · 1 min read
US Economics Weekly Businesses to the rescue? The proposed favourable change to the tax treatment of capital expenditure raises the question of whether it will actually be businesses, rather than consumers, that rescue the economy from a number... 13th December 2010 · 1 min read
US Economics Weekly Consumers to the rescue? "Never bet against the US consumer" proved to be a valuable maxim during the last decade. The latest data suggest that the US consumer might be slipping the superhero cape back on, ready to save the... 6th December 2010 · 1 min read
US Economics Weekly US banks’ exposure to Europe has fallen While the health of European banks is once again in question, the financial crisis is becoming a distant memory for US banks. So far this year, they have enjoyed a decent rise in net income. Moreover... 29th November 2010 · 1 min read
US Economics Weekly Deflation still the real danger Fears that the Fed has put the economy on the path towards rampant inflation looked even more misguided last week when it was announced that core CPI inflation fell to a record low of just 0.6% in... 22nd November 2010 · 1 min read
US Economics Weekly Fed criticism over the top but not all unfounded The Fed's quantitative easing may be unconventional, but it is designed to work through the same channels as conventional changes in short-term interest rates; by lowering long-term interest rates... 15th November 2010 · 1 min read
US Economics Weekly QE2 will not lead to runaway inflation It is very easy to understand why some fear that the Fed's second-round of quantitative easing will lead to a surge in inflation. But we suspect that the ultimate impact on core inflation will be... 8th November 2010 · 1 min read
