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 worsening supply chain disruptions weigh on trade in both directions.
Andrew Hunter Senior US Economist
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US Economics Weekly

Omicron reaches plateau, leaving Fed free to hike

We expect the Fed to deliver some heavy hints at next week’s FOMC that it is planning an interest rate hike in March. With the Omicron wave now past its peak nationally, there is little to hold the Fed back, particularly if next week brings news of a further acceleration in wage growth.

21 January 2022

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 inflation will average 4.3% in 2022 and close to 3.0% in 2023. GDP growth will slow to 2.7% this year and 2.0% in 2023.

20 January 2022

US Fed Watch

Will Fed signal that March rate hike is coming?

With many Fed officials now either explicitly supporting, or at least “open to”, an interest rate hike in March, we would expect to see some acknowledgement of that in the statement issued after the upcoming January FOMC meeting next week or, at the very least, when the minutes are released three weeks later. Overall, we expect four 25bp rate hikes this year and, since core inflation is likely to remain well above the 2% target, an additional four rate hikes next year, which would take the fed funds target range to between 2.00% and 2.25% by end-2023.

19 January 2022

More from Andrew Hunter

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. Alongside the softening in manufacturing activity in Asia, ongoing supply disruptions suggest the manufacturing recovery will lose steam over the coming months.

1 October 2021

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 – assuming Congress reaches a deal to raise or suspend the debt ceiling.

30 September 2021

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 quarter while underlying inflationary pressures continue to build.

17 September 2021
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