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Easing shortages to push down core goods inflation

There has been little sign that price pressures have eased yet, but the survey evidence suggests that supply shortages continue to improve. That reinforces our view that core goods inflation will fall over the second half of the year.
Andrew Hunter Senior US Economist
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US Data Response

Industrial Production (Jul.)

The 0.6% m/m rise in industrial production in July was much stronger than we expected and provides another clear sign that the economy is still in expansionary territory. That said, the likely drag on manufacturing from the impending global economic downturn means that the resilience of production may not last for long.

16 August 2022

US Economics Weekly

More good news on inflation coming soon

The drop back in CPI inflation in July wasn’t enough alone to convince Fed officials to change their plans for interest rate hikes. But we expect the better news on inflation to continue over the coming months, which will eventually persuade the Fed to halt its tightening cycle early next year.

12 August 2022

US Economics Update

Is there really such thing as a ‘jobful’ recession?

While history shows that recessions can begin even while employment is still rising, the current rate of payroll employment growth is far too strong to be consistent with an economic downturn. By the same token, although we think an outright contraction will be avoided, any recession over the next couple of years would almost certainly coincide with a decline in employment and rise in the unemployment rate.

11 August 2022

More from Andrew Hunter

US Economics Weekly

Fed refuses to blink, as growth fears mount

Chair Jerome Powell signalled this week that the Fed will press ahead with its planned series of aggressive interest rate hikes, even as evidence mounts that economic growth will be weak in the second half of the year.

24 June 2022

US Data Response

Industrial Production (May)

The muted 0.2% m/m rise in industrial production in May adds to the evidence that the economy is slowing. But there is still little in activity data to suggest a recession is on the horizon, or to dissuade the Fed from pressing ahead with more aggressive policy tightening. Markets Drop-In (22nd June, 10:00 ET/15:00 BST): Join our Markets team for this special briefing on the outlook for equities, bonds and FX and a discussion about revisions to our forecasts. Register now

17 June 2022

US Data Response

Retail Sales (May)

The 0.3% m/m fall in retail sales in May and downward revisions to previous months’ gains suggest that surging prices might finally be taking their toll on real consumption. But with the latter still on course for solid growth of 3% annualised in the second quarter, that won’t stop the Fed from accelerating the pace of policy tightening later today.

15 June 2022
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