US Economics Update Surveys suggest labour shortages persist In contrast to the stronger payrolls figures released last week, the latest survey data suggest that labour shortages remain acute. That supports our view that the acceleration in employment growth in... 7th July 2021 · 3 mins read
US Economics Update Inflation “transitory”, but Fed now projects rate hikes The Fed continued to stick to its view that the surge in inflation "largely" reflects "transitory factors", but officials revised their inflation projections up significantly for this year and the... 16th June 2021 · 3 mins read
US Economics Update Surveys point to surge in wage and price inflation The surge in job openings and voluntary quits in April add to the survey and anecdotal evidence that labour shortages are becoming increasingly acute. Those shortages look set to persist for some time... 8th June 2021 · 3 mins read
US Economics Update Monetary Indicators Monitor (Apr.) Growth in the key monetary aggregates and bank lending has turned up over recent months, driven in part by the Fed’s continued asset purchases. 26th May 2021 · 3 mins read
US Economics Update Labour shortages intensifying The NFIB and JOLT surveys published today add to evidence from the April employment report that labour shortages are widespread, pushing up prices and potentially acting as a brake on the recovery. 11th May 2021 · 4 mins read
US Economics Update How big a risk is the slowdown in vaccinations? The sharp drop in demand for vaccines in recent weeks is a risk to our assumption that the rollout reaches critical mass over the coming months. That could mean infections and hospitalisations remain... 4th May 2021 · 3 mins read
US Economics Update Loosening credit standards will support activity The Fed’s latest Senior Loan Officer Survey shows that lending standards are being eased across the board, which will help keep consumption and investment growth solid even as support from fiscal... 4th May 2021 · 2 mins read
US Economics Update Fed remains dovish despite strength of recovery Although it took a more upbeat tone on the economic outlook and acknowledged that inflation has risen in its statement released after today’s FOMC meeting, the Fed offered no hints that it was... 28th April 2021 · 3 mins read
US Economics Update Biden plan points to limited further fiscal expansion The $1.8trn in spending and tax credits in the American Families Plan would provide a relatively small boost to GDP growth as, like the earlier infrastructure proposals, it would be mostly paid for... 28th April 2021 · 4 mins read
US Economics Update American Jobs Plan not a return to big government We suspect that President Joe Biden will struggle to garner bipartisan support for his $2trn in infrastructure spending, even if he was willing to placate centrist Senate Republicans by dropping his... 31st March 2021 · 7 mins read
US Economics Update Monetary Indicators Monitor (Feb.) The Fed’s asset purchases are fuelling a continued surge in the narrow money aggregates, but growth in both our M3 measure of broad money and bank lending remain on a downward trend. 30th March 2021 · 3 mins read
US Economics Update CPI inflation will rise back above PCE inflation The unusual rise in the Fed’s preferred PCE measure of inflation above CPI inflation in January partly reflects the impact of the differing methodology which, as spending patterns return to pre... 24th March 2021 · 4 mins read
US Economics Update Fed plays down prospect of rate hikes The updated economic projections released after the Fed’s mid-March meeting show that officials expect strong economic growth this year to have only a transitory impact on inflation, which explains... 17th March 2021 · 3 mins read
US Economics Update Stimulus is big, but we won’t be revising our forecasts Although Democrats are close to securing passage of nearly all the $1.9trn originally requested by President Joe Biden in his American Rescue Plan, which is significantly more than the $1trn in... 6th March 2021 · 4 mins read
US Economics Update What explains the huge drop in the labour force? Around half of the four million decline in the labour force over the past year reflects a wave of early retirements which is likely to be irreversible. The smaller 2.3 million drop in prime-age... 3rd March 2021 · 3 mins read
US Economics Update Fed won’t over-react to rising real yields If real yields continue to rise we could see the Fed shifting the composition of its monthly asset purchases to focus more on the long end of the curve, but we doubt that it would be willing to adopt... 2nd March 2021 · 5 mins read
