US Economics Weekly Could the neutral rate be even lower? While the decline in the neutral real fed funds rate in recent years can be explained in part by the decline in potential GDP growth, there are other factors, including increased risk aversion, higher... 30th September 2016 · 1 min read
US Economics Weekly Fed telegraphs a December rate hike The Fed left its policy rate unchanged at between 0.25% and 0.50% at last week's FOMC meeting, but it appears to be firmly on track for a December hike. However, the fed funds rate is likely to... 23rd September 2016 · 1 min read
US Economics Weekly Markets still relatively sanguine about the election Hillary Clinton’s recent stumble, both figuratively and literally, appears to have thrown the US presidential election race wide open again. The conventional wisdom is that the markets could react... 16th September 2016 · 1 min read
US Economics Weekly Uncertainty mounts over pick-up in GDP growth There is now a marked gap opening up between the incoming expenditure-based data, which point to a healthy rebound in third-quarter GDP growth and the production-based business survey evidence, which... 9th September 2016 · 1 min read
US Economics Weekly Rise in labour’s share of income has further to run The gradual decline in the unemployment rate over the past couple of years has generated a cyclical rebound in labour’s share of income, which we suspect has further to run. At first glance, this... 2nd September 2016 · 1 min read
US Economics Weekly Weakness of residential investment unlikely to last After providing a small but valuable contribution to growth over the past couple of years, residential investment unexpectedly became a drag in the second quarter, contracting at a 7.7% annualised... 26th August 2016 · 1 min read
US Economics Weekly Should we be worried by household debt? The latest data show that household debt is now close to its 2008 peak in dollar terms. However, the gains in income over the past eight years and the decline in interest rates mean that households... 19th August 2016 · 1 min read
US Economics Weekly Businesses continue to favour hiring over capex The latest data suggest that while firms are reluctant to increase capital expenditure, they are nonetheless continuing to expand their workforces. With the unemployment rate below 5%, however, the... 12th August 2016 · 1 min read
US Economics Weekly Pace of consumption growth will inevitably slow The news that real personal spending increased by 0.3% m/m in June, along with the reported surge in auto manufacturers’ unit sales in July, implies that real consumption growth began the third... 5th August 2016 · 1 min read
US Economics Weekly Weak GDP will give Fed reason to pause Despite the more hawkish language in last week’s FOMC statement, the GDP data have significantly reduced the chances of a near-term rate hike. The economy has been growing at around 1% annualised for... 29th July 2016 · 1 min read
US Economics Weekly GDP growth boosted by strength of consumption Our calculations indicate that second-quarter GDP growth accelerated to a more respectable 2.5% annualised, following a disappointing 1.1% gain in the first quarter. But be aware that the BEA will... 22nd July 2016 · 1 min read
US Economics Weekly Labour market nearing full employment The incoming labour market data, including the strong rebound in June payrolls, have confirmed our suspicions that the big declines in April and May were only a temporary blip rather than the start of... 15th July 2016 · 1 min read
US Economics Weekly Consumer spending will continue to drive GDP growth The latest evidence suggests that GDP growth accelerated to around 3% annualised in the secondquarter. Furthermore, the rebound in both of the June ISM surveys suggests that this strengtheningin... 8th July 2016 · 1 min read
US Economics Weekly Brexit vote doesn’t change the task facing the Fed While the UK Brexit vote triggered some initial volatility in financial markets, many of the adverse moves have already been unwound and overall financial conditions in the US remain considerably... 1st July 2016 · 1 min read
US Economics Weekly Wage growth shows “tentative” signs of a pick-up The growth rate of average hourly earnings has accelerated to 2.5%, from a norm of nearer 2.0% in recent years, and other measures like the Atlanta Fed’s tracker suggest that median wage growth is... 24th June 2016 · 1 min read
US Economics Weekly Fed’s rate forecasts veering like a drunken sailor The key US event this week will be Fed Chair Janet Yellen’s semi-annual testimony to Congress. She will be testifying to the Senate Banking Committee on Tuesday and the House Financial Services... 17th June 2016 · 1 min read
