My subscription
...
Filters
My Subscription All Publications

737 Max woes will continue to weigh on GDP growth

The grounding of the Boeing 737 Max aircraft delivered a hit to business equipment investment and net exports in the second quarter, reducing annualised GDP growth by 0.25% points. A similar hit to third quarter GDP is likely if production is cut further. The flipside is that once jets are approved for take-off and production is ramped up, either later this year or early next year, that will provide a lift to GDP growth.
Michael Pearce Senior US Economist
Continue reading

More from US

US Economics Update

Easing shortages to push down core goods inflation

There has been little sign that price pressures have eased yet, but the survey evidence suggests that supply shortages continue to improve. That reinforces our view that core goods inflation will fall over the second half of the year.

29 June 2022

US Economics Update

Recession Watch (Jun.)

While our models suggest that recession risks are still low, the Fed’s rapid policy tightening will trigger a marked slowdown in economic growth, which means that the risks are likely to build over the coming quarters. But suggestions that a recession is imminent or inevitable are well wide of the mark.

29 June 2022

US Data Response

Durable Goods (May)

The surprisingly robust 0.7% rise in durable goods orders last month was much better than some of the downbeat survey evidence had suggested and is consistent with business equipment investment growth slowing in the second quarter rather than going into reverse.

27 June 2022

More from Michael Pearce

US Economics Weekly

Lasting price pressures building

The continued surge in prices last month was again mostly concentrated in sectors reopening or facing intense supply constraints, which allows the Fed to stick with its “largely transitory” story for now. But with signs of cyclical price pressures building and the extremely strong job openings and quits figures pointing to stronger wage pressures, we believe the Fed will eventually have to acknowledge that inflation will remain elevated for much longer.

11 June 2021

US Data Response

ISM Manufacturing Index (May)

While the headline ISM manufacturing index edged up to 61.2 in May, from 60.7, the main takeaway from the release was that shortages of workers, and not just raw materials, now appear to be playing a key role in holding back production and pushing up prices.

1 June 2021

US Economics Weekly

Fed remaining dovish as supply-side constraints mount

In a relatively quiet week, the few data releases we did get added to signs that shortages are pushing up prices further and restraining the pace of economic recovery.

21 May 2021
↑ Back to top