Industrial Production (Sep.)

The 1.3% fall in industrial production in September partly reflects a temporary hit to mining and chemicals output from Hurricane Ida and a drop in cooling demand, as the weather returned to seasonal norms. That said, most of the 0.7% drop in manufacturing output is due to worsening shortages, particularly of semiconductors, which will hold back production for some considerable time.
Michael Pearce Senior US Economist
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US Economics Weekly

Powell signals turning point in policy

Fed Chair Jerome Powell’s congressional testimony this week was markedly more hawkish. We wouldn’t characterise it as a full-blown Volcker moment. But there could be parallels with former Chair Alan Greenspan’s notorious February 1994 Humphrey-Hawkins testimony.

3 December 2021

US Data Response

Employment Report (Nov.)

The disappointing 210,000 gain in non-farm payrolls in November suggests the labour market recovery was faltering even before the potential impact of the new Omicron variant, possibly due to the rising infection rates in the Northeast and Midwest. Nevertheless, the Fed is still likely to push ahead with plans to accelerate the pace of its QE taper at this month’s FOMC meeting.

3 December 2021

US Data Response

ISM Manufacturing Index (Nov.)

The November ISM manufacturing survey suggests that supply shortages are yet to ease significantly, but it does at least echo anecdotal reports that they are no longer getting worse.

1 December 2021

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US Economics Update

Deepening labour shortages point to lasting damage

The August Job Openings and Labor Turnover survey released yesterday added to signs that labour shortages are still getting worse at a time when many of the temporary factors that were supposedly holding back labour supply are easing. We’re getting more concerned that much of the drop in labour force participation will prove permanent, which is in turn a reason to expect the recovery in real activity and employment to disappoint over the coming years, while wage and price growth remain elevated.

13 October 2021

US Economics Weekly

Congress hits snooze on the debt ceiling

Even the more modest 194,000 gain in non-farm payrolls in September is “decent” enough for the Fed to announce at next month’s meeting that it will begin tapering its asset purchases, especially now the threat of a government debt default has been pushed back.

8 October 2021

US Data Response

Durable Goods (Aug.)

The 1.8% m/m rise in durable goods orders in August was due to the ongoing rebound in commercial aircraft orders together with solid growth in underlying capital goods orders, with the latter reflecting the strength of investment amid widespread labour shortages.

27 September 2021
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