US Economics Update Residual seasonality something to note, not fear Evidence of residual seasonality in the core PCE deflator means there is a risk that core price pressures will rebound in the new year. That said, the residual seasonality is concentrated in core... 14th October 2024 · 2 mins read
US Economics Update Is the labour market really that strong? The unexpectedly strong 254,000 gain in payroll employment in September was a welcome surprise, but the deterioration in most other labour market indicators suggests this was a one-off rather than the... 7th October 2024 · 3 mins read
US Economics Update Are the upside risks to core inflation mounting? We continue to believe that core PCE inflation will return to the 2%target on a sustained basis early next year, as labour market conditions gradually ease. Up until recently we would also have argued... 3rd October 2024 · 5 mins read
US Economics Update JOLTS point to further easing in wage growth The August JOLTS data provides some reassurance against fears that labour market conditions will deteriorate further, while the sharp fall in the private quits rate suggests that core services... 1st October 2024 · 2 mins read
US Economics Update Port strike won’t rock the boat The strike at East and Gulf Coast ports is unlikely to trigger major economic disruption. Many retailers have made plans in anticipation of the strike and our sense is that, this close to the election... 25th September 2024 · 3 mins read
US Housing Market Update Sellers lose grip on the market Increased supply and weak demand are both contributing to the slowdown in house price growth. The recent sharp drop in mortgage rates should cause the market to retighten, but it will take time for... 24th September 2024 · 4 mins read
US Economics Update Fed opts to start loosening cycle with a bang The Fed did cut its policy rate by a bigger 50bp today, to between 4.75% and 5.00%, but the vote was not unanimous and the new rate projections point to smaller 25bp cuts at the remaining two FOMC... 18th September 2024 · 3 mins read
US Economics Update Lower gasoline prices to cushion consumers Despite the US being a net oil exporter, the recent plunge in the oil price will be a tailwind for the economy, as lower gasoline prices support consumer confidence and real consumption. The Fed will... 17th September 2024 · 3 mins read
US Economics Update Low saving rate not a major concern The continued decline in the saving rate, which is now close to a 16-year low, is not a major concern given the recent surge in household net wealth. Furthermore, as the saving rate is calculated from... 16th September 2024 · 4 mins read
US Economics Update JOLTS shows continued labour market normalisation Although job openings fell sharply in July, the totality of the JOLTS data points to a labour market that continues to normalise, rather than one rapidly deteriorating. That leaves it up to the August... 4th September 2024 · 2 mins read
US Economics Update Harris unveils populist economic plan Kamala Harris unveiled her economic plan today and it appears to be focused on mostly small-scale pocket-book populist issues. Our main take-away is that, like her opponent Donald Trump, she has shied... 16th August 2024 · 2 mins read
US Economics Update Hard landing risk rising, but not the base case Despite the weakness of the latest labour market data, we judge that a soft landing is still the most likely outcome for the economy. Nonetheless, the risk of a hard landing has increased, while the... 5th August 2024 · 4 mins read
US Economics Update Fed lays the groundwork for September rate cut There was no surprise rate cut from the Fed today, with the fed funds target range left unchanged at between 5.25% and 5.50%, but the changes in the accompanying statement – which included a shift... 31st July 2024 · 2 mins read
US Economics Update What to make of the rise in business bankruptcies? Business bankruptcies rose further in the first half of 2024, mainly due to higher Chapter 11 filings as firms were forced to restructure their debts. It is typically the change in borrowing costs... 31st July 2024 · 2 mins read
US Economics Update Wage pressures continue to ease The JOLTS labour market data for June will do little to change the Fed’s assessment of labour market conditions ahead of its policy announcement tomorrow, with slack continuing to grow gradually and... 30th July 2024 · 2 mins read
Global Economics Update Latest thoughts on r* and where rates end this cycle In detailed analysis last year, we concluded that equilibrium nominal interest rates would settle at between 3% and 4% in advanced economies in the next ten years. We maintain that opinion and in fact... 30th July 2024 · 4 mins read
