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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.

Andrew Hunter Senior US Economist
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US Economics Weekly

Spender of last resort

With China’s economy hampered by its zero-covid lockdowns, and Europe’s economy suffering because of the massive surge in imported energy prices caused by the war in Ukraine, the American consumer has once-again emerged as the world’s spender of last resort.

20 May 2022

US Chart Book

Economy powering ahead

The strength of the hard activity data for April refutes the recent message from financial markets that the economy is at risk of imminent recession. The solid gain in control group retail sales, together with upward revisions to past months leaves the underlying trend in consumer spending looking much stronger. Meanwhile the continued rebound in manufacturing output, in particular the recovery in vehicle output to the pre-pandemic level, illustrates how the gradual easing of supply shortages is supporting a rebound in production. With signs that core inflation is still running far too hot, the continued strength of economic activity supports the Fed’s decision to press ahead with 50bp rate hikes at the next couple of FOMC meetings. Nevertheless, we still expect a drop back in inflation later this year, alongside signs of a slowdown in economic activity will prompt the FOMC to shift back to 25bp hikes by the fall.

18 May 2022

US Data Response

Industrial Production (Apr.)

The 0.8% rise in manufacturing output last month underlines that it is not just consumer spending powering the economy forward. While the survey evidence suggests global manufacturing demand is cooling, the gradual easing of input shortages over recent months is helping to keep output growth strong.

17 May 2022

More from Andrew Hunter

US Economics Update

Build Back Better to have limited near-term benefits

The Build Back Better Act, which was passed by the House today, would provide only a small boost to economic growth next year. With the economy already running up against capacity constraints and any supply-side benefits of the plan likely to take time to feed through, there is a risk that it exacerbates rather than eases the economy’s near-term inflation problems.

19 November 2021

US Data Response

Industrial Production (Oct.)

The strong 1.6% m/m rebound in industrial production in October came as the unwinding of earlier hurricane-related disruption and a partial recovery in motor vehicle production boosted manufacturing output. But with global supply problems likely to persist, we doubt that rapid pace of growth will last.

16 November 2021

US Data Response

Consumer Prices (Oct.)

The 0.9% m/m surge in consumer prices in October illustrates that the upward pressure from supply shortages remains intense and that, even when those effects eventually fade, rising cyclical pressures are likely to keep inflation unusually high.

10 November 2021
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