GDP (Q3 1st Estimate)

At 3.5% annualised, GDP growth remained unusually strong in the third quarter, thanks partly to this year’s fiscal stimulus, but there are signs that higher interest rates are beginning to have a bigger restraining effect. Once the boost from fiscal stimulus fades next year, we expect economic growth to slow below its potential rate, forcing the Fed to the side-lines by mid-2019.
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US Data Response

ISM Manufacturing Index (Jul.)

The further small decline in the ISM manufacturing index in July probably has more to do with the continued drag from supply constraints than waning demand. The details did at least suggest that supplier delivery times and the accompanying upward pressure on prices may have peaked. But we suspect it will be a long time before supply constraints ease meaningfully.

2 August 2021

US Economics Weekly

Recovery to slow from here

The slightly disappointing second-quarter GDP data released this week and another dovish press conference from Chair Jerome Powell strengthen our belief that the Fed is unlikely to begin tapering its asset purchases until early next year.

30 July 2021

US Employment Report Preview

Payroll growth to remain elevated

With labour supply continuing to lag the recovery in demand, we estimate that growth in non-farm payrolls slowed to 650,000 in July.

 

29 July 2021

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Japan Economics Weekly

Post-Olympics public spending boost, BoJ holding firm

Japan’s government appears to be lining up a stimulus programme to prevent an economic downturn after the Tokyo Olympics next year. While increased public spending would provide a welcome boost to GDP, we don’t believe there’s any particular reason to expect a post-Olympics slowdown. Meanwhile, the Bank of Japan is bucking the global trend towards additional monetary easing. Unlike some commentators, we don’t think that loosening by other major central banks puts the Bank of Japan’s policy framework under pressure.

21 June 2019

Emerging Markets Economics Chart Book

EM growth running at a three-year low

EM GDP growth slowed to just 3.3% y/y in Q1, its weakest pace since the first half of 2016, and our Tracker suggests that it remained sluggish in Q2. Growth should pick up a little in the second half of the year. Large commodity producers, such as Brazil, Russia and South Africa, are likely to find their feet again after a terrible performance in Q1. And Turkey and Argentina should recover from the downturns caused by last year’s currency crises. But growth will remain weak and, in most cases, our 2019 and 2020 GDP growth forecasts are below consensus.

21 June 2019

Emerging Asia Economics Weekly

Growth continues to weaken, rates to be cut further

After a very weak first quarter that saw GDP growth in many countries drop to a post-financial crisis low, the most recent data suggest growth across Emerging Asia has continued to slow. Weak growth is likely to prompt further interest rate cuts over the coming months across the region. Despite leaving rates unchanged on Thursday, we expect the central banks of the Philippines and Indonesia to loosen monetary policy at their next meetings.

21 June 2019
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