Filtered by Subscriptions: US Economics Use setting US Economics
First month of target-consistent price data this year Core CPI increased by a more modest 0.2%m/m in May and, although we still need to see the PPI data tomorrow, it looks like core PCE, the Fed's preferred inflation metric, increased by significantly …
12th June 2024
We don’t think that the below-potential GDP growth implied by the recent activity data is a cause for concern yet, particularly while the labour market appears healthy. That will keep the Fed squarely focused on the inflation side of its mandate at its …
7th June 2024
Payrolls outperform, but gap with household measure growing The bigger-than-expected 272,000 gain in non-farm payrolls in May will soothe recent fears that the bottom had suddenly dropped out of the economy. With average hourly earnings increasing by 0.4% …
Net trade set to weigh on GDP again this quarter The April trade data suggest that net trade is on track to weigh on GDP growth again this quarter, but that is primarily due to continued strength in imports, which paints a better picture of domestic …
6th June 2024
ISM services index rebounds, but still consistent with lower inflation The rise in the ISM services index to 53.8 in May, from 49.4, meant that the weighted ISM index rebounded last month, despite a decline in the manufacturing index. That still leaves it …
5th June 2024
Disinflationary trend gradually reasserting itself Economy and labour market losing momentum New projections should still show one or two rate cuts this year With no prospect of the Fed adjusting policy next week, the focus of the FOMC meeting will be the …
The April JOLTS data provided further evidence of normalisation, with job openings falling further, layoffs still at historically low levels and the leading indicators all pointing to wage growth cooling. The job openings rate fell to 4.8% in April, from …
4th June 2024
Fall in ISM manufacturing index suggests economy losing momentum The drop in the ISM manufacturing index in May adds to the sense that the economy is losing momentum, while the drop back in the prices paid index should soothe concerns about a potential …
3rd June 2024
Trump conviction won’t sway the election Trump campaign won’t be decided by courts We doubt that Donald Trump’s New York felony conviction on charges of falsifying business documents will have any significant impact on the presidential election …
31st May 2024
Inflation data still too strong, but slump in real spending the bigger story As expected, the PCE deflator data suggest that, although not quite as bad as the first three months of the year, inflation was still running above target in April. At the same …
Labour market gradually cooling We forecast another 175,000 gain in non-farm payrolls in May, with the unemployment rate expected to be unchanged at 3.9%. Wage growth should be unchanged at a muted 3.9%. Healthcare job surge to continue The more modest …
30th May 2024
Fed in wait-and-see mode Fed to proceed with caution The minutes of the Fed’s early May policy meeting were, not surprisingly given the backdrop of data releases ahead of that meeting, somewhat hawkish. The resilience of economic growth and employment, …
24th May 2024
Durable goods orders slowly trending up Headline and core durable goods both did better than we expected in April, suggesting that the earlier decline in corporate borrowing costs may be feeding through. Nonetheless, with growth in underlying capital …
The strength of healthcare employment and spending growth is because the sector is still recovering from the pandemic and also thanks to the jump in Affordable Care Act (ACA) enrolments. Employment and spending have almost caught up with their …
23rd May 2024
FOMC stresses higher for longer The minutes of the Fed’s early May policy meeting are, not surprisingly given the backdrop of data releases ahead of that meeting, somewhat hawkish. The resilience of economic growth and employment, and particularly the …
22nd May 2024
The slight easing of inflationary pressures in April and softer activity data are consistent with the Fed cutting interest rates in September. Although it is taking a little longer than expected, we believe that core inflation is on course to fall back to …
21st May 2024
New tariffs much ado about nothing The Biden administration’s announcement this week of an increase in tariffs on hi-tech & green-related goods imports from China will have little impact. The biggest change ostensibly was the announcement that the tariff …
17th May 2024
Soft IP adds to downside surprises on activity The 0.3% m/m decline in manufacturing output in April , together with the downward revision to the March gain, from 0.5% to 0.2%, continues the run of weaker activity data and will further solidify …
16th May 2024
This interactive dashboard allows you to explore all of our forecasts and key data for the US economy. If you have subscriber access to the data underlying this redesigned dashboard, you can download it via the menu options in the top right of each chart …
This note answers some of the most frequently asked questions that we received from clients during a recent online briefing about the latest US tariffs on China. Watch the original briefing here . What has been announced? Yesterday was the end of a …
15th May 2024
CPI consistent with September rate cut The slightly more modest 0.3% m/m increase in core CPI in April was even better than it looked, particularly given that we already know the PPI components that feed into the Fed’s preferred PCE deflator measure came …
Consumers not looking quite as strong We would caution against jumping to the conclusion that consumers are starting to crack under high interest rates, despite the disappointing retail sales data for April, as some payback always seemed likely after the …
PPI brings mixed news for PCE supercore The bigger-than-expected 0.5% m/m increases in both all items and core final demand producer prices in April were mainly due to downward revisions to earlier months, with the 0.2% m/m gains in March both revised to …
14th May 2024
Markets brace for April data dump After a quiet week for data this week, following April’s softer Employment Report, things will heat up again next week with April’s CPI report. CPI the new king of data releases CPI is now undoubtedly the most …
10th May 2024
Confidence slump leaves us wondering what we may be missing The renewed slump in the University of Michigan consumer sentiment gauge to a six-month low of 67.4 in May, from 77.2, is hard to explain given that gasoline prices are now falling again, the …
Banks easing credit conditions amid soft demand The second-quarter Senior Loan Officer Opinion Survey revealed that, a year after the regional banking crisis, only a modest net share of banks are still tightening lending standards. The Net percentage of …
6th May 2024
Fundamentals point to slower wage growth Powell leaves all options open Fed Chair Jerome Powell argued in his post-FOMC press conference this week that, despite the stickiness of inflation in recent months, additional interest rate hikes were still …
3rd May 2024
Rise in prices paid not yet a concern The fall in the ISM services index to 49.4 in April, from 51.4 in March, suggests that services spending could slow from the 4% annualised in the first quarter. The prices paid index rebounded but, for now, it is …
Labour market easing puts rate cuts back on the table April’s employment report was weaker across the board; with employment growth slowing back to the pace from last fall, the unemployment rate ticking up to 3.9% and average hourly earnings growth …
Deficit narrows; Productivity growth stalls The trade deficit narrowed slightly in March to $69.4bn, from $69.5bn, with exports down by 2.0% m/m and imports falling by 1.6%. The $5.1bn decline in goods exports included a $1.2bn drop in civilian aircraft …
2nd May 2024
Fed biding its time Fed Chair Jerome Powell argued in his post-FOMC press conference that, despite the stickiness of inflation in recent months, additional interest rate hikes were still “unlikely”. Moreover, while he admitted that the strong start to the …
1st May 2024
Fed statement acknowledges inflation rebound; announces QT taper The Fed admitted in the statement issued after today’s FOMC meeting that “in recent months, there has been a lack of further progress toward the… 2% inflation objective”. Otherwise, today’s …
Dollar’s strength not a threat to US economy The dollar’s rise is attracting a lot of attention, but is nowhere near big enough yet to have any significant impact on US inflation, although it does appear to be weighing on exports. In real trade-weighted …
The March JOLTS data showed clearer signs that labour market tightness is continuing to ease. Slower downward progress in wage growth could be concerning, but for now it still appears to be moving broadly in line with the forward-looking indicators, which …
Manufacturing struggling for momentum The fall in the ISM manufacturing index back below the theoretical 50.0 no-change level in April suggests that the nascent recovery in the manufacturing sector may already have gone into reverse. While the further …
Wage growth now looks a little sticky too The persistence of wage growth is another reason for the Fed to take its time on rate cuts. According to the first-quarter employment cost index, civilian wages increased at a 1.1% non-annualised pace and the …
30th April 2024
Trump, the Fed, and the dollar Most of the major policy initiatives being suggested by Donald Trump’s campaign would be inflationary; whether it’s narrowing the trade deficit via tariffs or a dollar devaluation, curbing immigration or, now we learn, …
29th April 2024
Have soft landing hopes been dashed? GDP growth slows, but stronger under the hood The slowdown in first-quarter GDP growth to 1.6% annualised, from 3.4%, was more marked than expected, but it was principally due to a bigger drag from the net exports …
26th April 2024
Disinflationary trend to resume soon; real spending still strong The slightly bigger-than-expected 3.7% annualised first-quarter gain in the core PCE deflator was principally because January’s gain was revised up to 0.50% from 0.45%. Nevertheless, the …
The fading of weather-related support and broader evidence of easing labour demand lead us to expect a smaller 200,000 rise in non-farm payrolls in April. We expect the unemployment rate to be unchanged at 3.8%, while average hourly earnings growth should …
25th April 2024
GDP growth slows, but underlying momentum remains strong First-quarter GDP growth came in weaker-than-expected at 1.6% annualised, the weakest quarterly gain in almost two years, but the strong 3.1% gain in final sales to private domestic purchasers …
Hot inflation data dash hopes for rate cuts anytime soon Will take longer for the Fed to get “greater confidence” about path to 2% inflation. Nevertheless, cuts in 2024 still plausible The recent run of stronger inflation and activity data has …
24th April 2024
First-quarter business equipment declined The rise in durable goods orders in March was mainly due to the volatile transport component, with core and underlying capital goods orders only inching up. While underlying capital goods shipments rose last …
Although the BLS’s new tenant rent index has overstated the speed of the slowdown in shelter inflation, the leading indicators remain unanimous in their message that the slowdown is still coming. Despite some larger monthly rises in core goods and …
23rd April 2024
Protectionism seen as a vote winner by both parties After Fed Chair Jerome Powell acknowledged this week that there has been a “lack of further progress” on lowering inflation this year, markets dialled back rate cut expectations, with the first 25bp …
19th April 2024
The recent upturn in activity and employment growth and the resilience of core inflation suggest that the Fed won't start cutting interest rates until later this year. But although it is taking a little longer than expected, we still believe that core …
18th April 2024
Manufacturing rallies, but hi-tech boom revised down The 0.4% m/m increase in industrial production in March was principally due to a 0.5% m/m increase in manufacturing output, which was a lot better than we had expected given the already-reported decline …
16th April 2024
Consumption growth still rock solid The strong rise in retail sales in March and upward revision to February’s data will further support the Fed’s stance that there is no rush to start lowering interest rates. The 0.7% m/m rise in headline sales was …
15th April 2024
The third consecutive 0.4% m/m increase in core CPI in March, coming on the heels of the 303,000 surge in non-farm payrolls, fuelled fears that a pick-up in the real economy is now translating into a resurgence in inflation too. We are not convinced. …
12th April 2024
Consumers taking their cue from gasoline prices The small decline in the University of Michigan measure of sentiment in April lends some support to our forecast that consumer spending growth will be weaker in the first half of this year. Higher gasoline …
