Recovery to slow from here

The slightly disappointing second-quarter GDP data released this week and another dovish press conference from Chair Jerome Powell strengthen our belief that the Fed is unlikely to begin tapering its asset purchases until early next year.
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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.

24 September 2021

US Economics Update

Taper to begin in November

Fed officials gave a heavy hint today that the QE taper will be formally announced in November and, presumably in response to concerns that the surge in inflation won't be as transitory as they originally hoped, there were notable increases in the median interest rate projections.

22 September 2021

US Chart Book

Data provide mixed signals on Delta impact

The latest data provide mixed signals on the impact that the Delta variant is having on the economy. The high frequency indicators for high contact services suggest that activity levelled out in August and weakened a little in early September. Last month’s retail sales report also revealed that spending on food services was broadly flat, but control group sales nevertheless rebounded strongly, as households refocused their spending online and in favour of goods consumption. Elsewhere, leisure and hospitality employment was unchanged in August which, because that sector had been such an important contributor to the strength of the gains in earlier months, helps to explain why payroll employment increased by little more than 200,000 last month. Finally, even though activity only stagnated, the prices for some high contact service activity like hotels and air fares fell quite sharply. The good news is that, with Delta variant infections having now peaked, we should see some rebound in affected activity and employment soon, although the downside is that could contribute to a renewed pick-up in inflation linked to reopening.

21 September 2021

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US Data Response

ISM Manufacturing Index (Jun.)

Although the ISM manufacturing index didn’t fall as far as feared in June, the decline in the more forward-looking new orders component suggests the worst is still to come.

1 July 2019

US Economics Weekly

Any G-20 trade truce unlikely to last

If the meeting between Presidents Trump and Xi at the G-20 tomorrow is successful, we would expect both sides to agree to resume negotiations and hold off on imposing new tariffs. But, given the fundamental differences between the two sides, we expect that any truce will ultimately break down later this year, with tariffs eventually being levied on all imports from China.

28 June 2019

US Employment Report Preview

Labour market succumbing to economic slowdown

Our model points to a subdued 125,000 gain in non-farm payrolls in June, suggesting that the labour market is succumbing to the broader slowdown in economic growth. The unemployment rate should remain at 3.6% in June, but we expect it to begin rising in the second half of the year.

27 June 2019
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