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.

Michael Pearce Senior US Economist
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US Economics Weekly

Powell gets the nod; GDP growth rebounding

The announcement on Monday morning that President Biden would nominate Jerome Powell for a second term as Fed Chair was largely as expected, although the unexplained delays in making it official may have persuaded some in the markets that Biden was leaning toward picking Lael Brainard instead. As far as monetary policy goes, Powell and Brainard hold very similar, largely dovish, views. Elsewhere, as a result of the flurry of economic data releases ahead of the Thanksgiving Holiday we have raised our fourth-quarter GDP growth forecast to 6.5% annualised, from 4.0%.

24 November 2021

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 in exports in October, which is why we now estimate that GDP growth will accelerate from 2.1% annualised in the third quarter to more than 5% in the fourth, well above our previous forecast of a rise to 4%.

24 November 2021

US Employment Report Preview

Slowdown ahead

We expect non-farm payrolls to have risen by a solid 500,000 in November, but the growing risk of a winter COVID wave and a dwindling supply of available workers look set to weigh on employment growth soon.

24 November 2021

More from Michael Pearce

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

US Data Response

Retail Sales (Aug.)

Even though the 0.7% rise in headline retail sales in August was much better than expected, the details were far less positive, with big downward revisions to previous months, while the rise in online and grocery store spending, which contrasts with stagnant spending at bars and restaurants, suggesting that Delta fears are playing a key role.

16 September 2021

US Fed Watch

Fed still preparing ground for QE taper

We think the sharp slowdown in employment growth in August and broader signs of weakness in the incoming activity data mean the Fed will hold off formally announcing a QE taper at its September meeting. The tapering discussion will take centre stage, but we are just as interested in the updated economic projections which will include 2024 for the first time. The latter will provide a guide to how quickly Fed officials see rates returning to neutral once conditions for lift-off have been met.

15 September 2021
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