Payroll growth to remain elevated

With labour supply continuing to lag the recovery in demand, we estimate that growth in non-farm payrolls slowed to 650,000 in July.

Andrew Hunter Senior US Economist
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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

More from Andrew Hunter

US Data Response

Durable Goods (Jun.)

The June durable goods data were a little weaker than we had expected, but the further rise in underlying orders suggests that business equipment investment growth is slowing only gradually.

27 July 2021

US Fed Watch

Fed not yet ready to conclude tapering discussion

A few regional Fed Presidents are pushing for the Fed to begin tapering its Treasury and MBS purchases sooner rather than later. But with Chair Jerome Powell recently arguing that the recovery is still “a ways off” from meeting the “substantial further progress” test, we don’t expect any new guidance on asset purchases at next week’s FOMC meeting.

21 July 2021

US Economics Weekly

Democrats kick-start budget; Powell future uncertain

The Democrats’ $3.5trn budget proposal is only the first step in what could be a protracted negotiation to a final bill, which will be roughly fiscally neutral. Meanwhile, another dovish showing from Fed Chair Jerome Powell this week hasn’t prevented rumours circulating that he is set to be replaced when his term expires next year.

16 July 2021
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