US Economics Weekly

US Economics Weekly

Labour force exodus shows no sign of reversing

This week brought more news that acute labour shortages and the resulting surge in wages are rapidly feeding through into the most cyclically sensitive components of the consumer price index.

15 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 Economics Weekly

A week is a long time in politics

Prime Minister Harold Wilson’s quip that “a week is a long time in politics”, which he made during one of the UK’s seemingly never-ending crises in the 1960s, aptly describes the Democratic Party’s implosion.

1 October 2021
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US Economics Weekly

Debt ceiling could still delay QE taper

This week the focus was on the Fed, which appears intent on announcing a QE taper at the next FOMC meeting in early November. Next week the focus will shift to fiscal policy, with the Democrat’s plans to boost infrastructure and social welfare spending balanced on a knife edge. A debt ceiling crisis in late-October could even delay the Fed’s taper plans.

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.

US Economics Weekly

Labour market shortages getting worse

Tapering is off the table this month and whether the Fed will make an announcement before year-end depends on the strength of employment, which is being held back by increasingly acute labour shortages and the spread of the Delta variant.

CE Spotlight 2021: The Rebirth Of Inflation? We’re holding a week of online events from 27th September to accompany our special research series. Event details and registration here.

US Economics Weekly

Delta and Ida add to headwinds

With employment increasing by less than 250,000 last month and other incoming data disappointing, the recovery appears to be losing momentum even faster than our already-below consensus forecasts imply. The slowdown initially reflected the fading of the fiscal stimulus, ongoing supply shortages and the detrimental impact that the related surge in prices has had on households’ purchasing power. But the weakness in employment suggests that the Delta variant is now weighing on domestic demand, while its spread across South-East Asia, and the resulting factory closures, means that supply shortages could get even worse too.

US Economics Weekly

Delta spreads; consumption slows; Powell stalls

The Delta-variant linked surge in coronavirus cases continues and has now spread well beyond just one or two southern states. Moreover, even in those southern states, particularly Florida, new case numbers remain close to record highs. Somewhat surprisingly, although more than 60% of adults national are fully vaccinated, hospitalisations are also very elevated and are not far off the record high reached at the start of this year.

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