US Economic Outlook Inflation to remain elevated as GDP growth slows We expect underlying inflation to remain well above the 2% target this year, which means the Fed will push ahead with four rate hikes even though real GDP growth is likely to disappoint. Core... 20th January 2022 · 22 mins read
US Data Response Retail Sales (Dec.) The 1.9% plunge in retail sales in December in part reflects what appears to be a problem with seasonal adjustment process around the holidays. The initial Omicron wave appears to have had only a... 14th January 2022 · 2 mins read
US Data Response Employment Report (Dec.) While the 199,000 gain in non-farm payrolls once again disappointed the consensus, a much larger gain in the household measure of employment and a tepid rise in participation pushed the unemployment... 7th January 2022 · 2 mins read
US Economics Update Fed “QT” could include outright asset sales this time As hinted at in the December FOMC minutes, we expect the Fed will begin shrinking its balance sheet later in 2022. They would start by allowing maturing assets to run off, but if longer-term bond... 6th January 2022 · 5 mins read
US Data Response International Trade (Nov.) The sharp rebound in the trade deficit in November means that net trade is now on track to be a small drag on economic growth in the fourth quarter, rather than a small boost as we had previously... 6th January 2022 · 2 mins read
US Employment Report Preview Payroll growth slowing ahead of Omicron hit The chaos caused by the rapid spread of the Omicron variant came too late to have much effect on December payrolls, which we estimate increased by a healthy 350,000. But the huge numbers of people... 4th January 2022 · 3 mins read
US Data Response Personal Income & Spending, Durable Goods (Nov.) The November durable goods and income & spending data are consistent with our estimate that fourth-quarter GDP growth was 6.5% annualised, but point to a slowdown in early 2022. 23rd December 2021 · 2 mins read
US Chart Pack Winter virus wave to slow economic momentum The Omicron variant has supercharged the seasonal wave of virus cases sweeping parts of the US, adding to the existing headwinds to consumption growth over the coming months. In contrast to... 21st December 2021 · 9 mins read
US Data Response Industrial Production (Nov.) The solid 0.7% increase in manufacturing output last month suggests that shortages are gradually easing. With demand still strong, the latest surveys are still consistent with manufacturing output... 16th December 2021 · 2 mins read
US Economics Update Fed pivot even more hawkish than expected The Fed delivered an even more hawkish shift at the December meeting than we had anticipated, with the pace of tapering doubled and officials now forecasting three rate hikes next year. Reflecting... 15th December 2021 · 3 mins read
US Fed Watch Fed pivot will take rates to more than 1.5% in 2023 In sharp contrast to the surprisingly dovish November meeting, we expect Fed officials will use their December meeting to lay the ground for markedly tighter policy in the years ahead. The... 8th December 2021 · 8 mins read
Biden says economy 'in strong shape' ahead of holidays Michael Pearce, US economist at Capital Economics, thinks the president was right to suggest that some of the stresses on the economy were starting to ease, but that all the problems wouldn't go away... 1st December 2021 · BBC
US Data Response Durable Goods, Adv. Trade (Oct.), GDP (Q3 2nd Est.) The 0.5% fall in durable goods orders was not as bad as it looked, given that it was entirely due to a fall in volatile aircraft orders. But the bigger news this morning was the huge 10.7% m/m surge... 24th November 2021 · 3 mins read
US Chart Pack Fed’s inflation dilemma isn’t going away Whether Jerome Powell or Lael Brainard is given the nod over the coming days, the next 12-18 months are shaping up to be an unusually challenging period for the Fed Chair. The October data showed a... 18th November 2021 · 8 mins read
US Data Response Retail Sales (Oct.) The 1.7% m/m rise in retail sales in October, driven by a similarly strong increase in underlying control group sales, suggests that real consumption will rebound to between 3% and 4% annualised in... 16th November 2021 · 2 mins read
US Economics Update Labour market conditions even tighter The September Job Opening and Labour Turnover survey shows labour market conditions are far tighter than the 4.6% unemployment rate suggests, and points to continued rapid wage growth. With... 12th November 2021 · 2 mins read
