US Economics Weekly Different party, same infrastructure week debacle The weakness of third-quarter GDP growth illustrates that, while demand remains strong, the economy has hit a wall of supply constraints. Ongoing product and labour shortages mean that growth will... 29th October 2021 · 8 mins read
US Fed Watch Inflation concerns to be offset by weaker growth The Fed is set to announce at next week’s FOMC meeting that it will shortly begin to taper its monthly asset purchases. But of more interest will be the extent to which the new statement reflects the... 27th October 2021 · 8 mins read
US Chart Pack Uncertainty over Fed’s reaction function We are confident in our new forecasts that GDP growth will be a disappointing 2.7% in 2022 and 2.0% in 2023, while core inflation remains elevated at close to 3%, but we are less confident in our... 21st October 2021 · 9 mins read
US Economic Outlook Whiff of stagflation gets stronger The whiff of stagflation is getting stronger as shortages worsen, leading to surging prices and weaker real GDP growth. Shortages of goods and intermediate inputs will eventually ease, although not... 18th October 2021 · 23 mins read
US Data Response Retail Sales (Sep.) The 0.7% m/m rise in retail sales in September suggests goods spending held up a little better than we had anticipated, but real consumption growth still slowed sharply in the third quarter. 15th October 2021 · 2 mins read
US Data Response Employment Report (Sep.) The disappointing 194,000 gain in non-farm payrolls in September probably still counts as “decent” enough for the Fed to begin tapering its asset purchases next month. But alongside signs that... 8th October 2021 · 2 mins read
US Economics Update Debt ceiling deal may only delay the inevitable The entrenched positions of both sides suggest the deal to suspend the debt ceiling until December may only delay rather than avert a crisis. And in that scenario, we doubt that the Treasury minting a... 7th October 2021 · 4 mins read
US Data Response US International Trade (Aug.) We expect that the widening in the trade deficit to $73.3bn in August, from $70.3bn, will soon start to reverse, as exports catch up with imports. But there is a risk over the coming months that... 5th October 2021 · 2 mins read
US Data Response ISM Manufacturing Index (Sep.) The small rise in the ISM manufacturing index to 61.1 in September, from 59.9, mostly reflects an artificial boost from lengthening supplier delivery times rather than any improvement in demand... 1st October 2021 · 2 mins read
US Employment Report Preview Delta continues to weigh on hiring We forecast a stronger 500,000 gain in non-farm payrolls in September. That should qualify as “decent” enough for the Fed to announce a tapering of its asset purchases at the November FOMC meeting –... 30th September 2021 · 3 mins read
CE Spotlight Will higher inflation force central banks to raise rates? We think a sustained period of inflation in the region of 3-4% over the coming years could be dealt with relatively easily by central banks. But if inflation were to rise much further than this... 23rd September 2021 · 33 mins read
US Chart Pack Data provide mixed signals on Delta impact The latest data provide mixed signals on the impact that the Delta variant is having on the economy. The high frequency indicators for high contact services suggest that activity levelled out in... 21st September 2021 · 9 mins read
US Economics Weekly Delta impact evident in both CPI and retail sales While the data released this week showed retail spending picking up in August as price gains moderated, the figures are still consistent with a sharp slowdown in consumption growth in the third... 17th September 2021 · 5 mins read
US Data Response Industrial Production (Aug.) The 0.4% m/m rise in industrial production in August lifted it back above its pre-pandemic peak, but was nevertheless weaker than we had expected and suggests that the industrial recovery is losing... 15th September 2021 · 2 mins read
US Economics Update Delta not the main factor weighing on growth With authorities having shown no appetite to reimpose restrictions on activity and new virus cases now levelling off, the Delta variant is still unlikely to have as big an impact on the economy as... 13th September 2021 · 4 mins read
US Data Response US International Trade (Jul.) The narrowing in the trade deficit to $70.1bn in July, from a revised $73.2bn, suggests that the drag on GDP growth from net trade in recent quarters will be partly reversed in the third. We’ll be... 2nd September 2021 · 2 mins read
