US Economics Update Phase One deal reduces downside risks The Phase One trade agreement signed today removes the downside risk of a never-ending escalation of tariffs imposed by the US and China on each other’s imports, but the modest scale of the roll-back... 15th January 2020 · 3 mins read
US Economics Update Tide starting to turn for business investment There is mounting evidence to suggest that business investment growth is set to rebound, which should help drive overall GDP growth back above its potential pace in the second half of this year. 14th January 2020 · 2 mins read
US Economics Update Is America at risk of Dutch disease? The surge in crude oil and natural gas production over the past decade has eliminated the petroleum-related trade deficit, but there is a risk that, echoing what happened in other countries that... 9th January 2020 · 5 mins read
US Economics Update Recession Watch (Jan.) The chances of a recession in 2020 are still barely higher than the normal background risk. Our composite 12 month ahead probit model – based on the yield curve, financial conditions and various... 9th January 2020 · 4 mins read
US Economics Update ISM too downbeat on manufacturing outlook The continued slide in the ISM manufacturing index is increasingly hard to explain, but the wider evidence suggests the more upbeat Markit manufacturing PMI is providing a more accurate gauge of... 8th January 2020 · 2 mins read
US Economics Update 737 Max woes could hit first-quarter GDP Boeing’s decision to halt production of the 737 Max aircraft could deliver a big hit to the manufacturing sector just as prospects were beginning to brighten. If it the shutdown lasts the entire... 17th December 2019 · 3 mins read
US Economics Update Phase One agreement not a big deal for the economy The “Phase One” trade deal apparently agreed with China is a small positive for the outlook to the extent that it removes the threat of further tariffs. But we doubt the rollback of existing tariffs... 16th December 2019 · 3 mins read
US Economics Update Fed begins prolonged hold The Fed called time on its easing cycle today by leaving the fed funds target range unchanged at 1.50%-1.75% and striking a more upbeat tone in the policy statement. With economic growth stabilising... 11th December 2019 · 3 mins read
US Economics Update Productivity growth may still be accelerating Recent payroll employment growth is likely to be revised down in the annual revision early next year, which is unquestionably a negative. But the flip-side is that productivity growth must have been... 4th December 2019 · 2 mins read
US Economics Update Recession Watch (Nov.) The risk of a recession occurring within the next year appears to have faded – with the yield curve un-inverting, financial conditions loosening and the incoming economic data still comfortably above... 20th November 2019 · 4 mins read
US Economics Update Fed Senior Loan Officer Survey (Q4) The Fed’s latest Senior Loan Officer survey points to a continued drop off in demand for commercial and industrial loans, consistent with business equipment investment contracting again in the fourth... 5th November 2019 · 2 mins read
US Economics Update Fed cuts rates, but draws line under further loosening The Fed cut interest rates for a third time as expected today, to between 1.5% and 1.75%, but changes in the statement suggest it is trying to dissuade the markets from pricing in any further... 30th October 2019 · 3 mins read
US Economics Update Recession Watch (Oct.) With the yield curve un-inverting, our composite model indicates that the probability of a recession in 12 months’ time has fallen to 11.7%, from a recent peak of more than 20%. Nevertheless, we... 28th October 2019 · 4 mins read
US Economics Update Fed’s balance sheet heading back above $4trn The Fed’s move to begin purchasing $60bn of Treasury bills per month will eventually push the size of its balance sheet back up to $4trn over the coming year, not far below its $4.2trn peak. However... 16th October 2019 · 5 mins read
US Economics Update GM strike will deepen the manufacturing downturn The strike at General Motors, together with continued problems at Boeing, means that the incoming manufacturing data over the next month or two will go from bad to terrible. That is another reason to... 9th October 2019 · 3 mins read
US Economics Update What to make of the diverging manufacturing surveys Other surveys suggest that the ISM manufacturing index is over-playing the extent of the factory-sector slowdown. But the wider evidence suggests the outlook for manufacturers is still pretty poor. 7th October 2019 · 2 mins read
