Soybean tariffs causing distortion in export growth

The rush by US exporters to beat the imposition of retaliatory tariffs on soybeans by China will provide an artificial boost to second-quarter GDP growth, but will become a potentially significant drag in the third quarter.
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US Economics Weekly

Labour force exodus shows no sign of reversing

This week brought more news that acute labour shortages and the resulting surge in wages are rapidly feeding through into the most cyclically sensitive components of the consumer price index.

15 October 2021

US Data Response

Retail Sales (Sep.)

The 0.7% m/m rise in retail sales in September suggests goods spending held up a little better than we had anticipated, but real consumption growth still slowed sharply in the third quarter.

15 October 2021

US Economics Update

Deepening labour shortages point to lasting damage

The August Job Openings and Labor Turnover survey released yesterday added to signs that labour shortages are still getting worse at a time when many of the temporary factors that were supposedly holding back labour supply are easing. We’re getting more concerned that much of the drop in labour force participation will prove permanent, which is in turn a reason to expect the recovery in real activity and employment to disappoint over the coming years, while wage and price growth remain elevated.

13 October 2021

More from Capital Economics Economist

Commodities Weekly Wrap

Middle East tensions back in the spotlight

Having surged this week, the price of oil could rise further in the near term if tensions between Iran and the US continue to escalate. At the same time, the price of gold is benefitting from an increase in safe-haven demand and a weaker US dollar. The prices of most industrial commodities also rose this week as both the Fed and the ECB signalled looser monetary policy and President Trump announced that he would meet with President Xi on the sidelines of the G20 meeting. Markets will be closely watching events in the Gulf over the next few days. Elsewhere, the G20 summit in Osaka, Japan, gets under way on Friday and all eyes will be on the Trump-Xi meeting. Even if some sort of trade agreement is reached between the two leaders, we do not think it will last. A deal which would be acceptable to both sides appears increasingly remote. We suspect that by early next year, nearly all of China’s exports to the US will be subject to tariffs. Finally, the biannual OPEC and OPEC+ meetings that had been scheduled for next week have been postponed until 1st-2nd July, reportedly because Russia was keen that the meetings be held after the G20.

21 June 2019

Capital Daily

Market reaction to US-Iran tensions likely to remain contained

This report is only available as a PDF. Click to download.

21 June 2019

Africa Economics Weekly

Easing cycle gains momentum, no news from SONA

Inflation figures released in South Africa and Nigeria this week supported our view that policymakers in both countries will loosen monetary policy later this year. Rates elsewhere are already falling; the Bank of Mozambique cut by 25bp this week. President Cyril Ramaphosa’s State of the Nation Address was disappointingly light on substance, suggesting that divisions within the ANC are hobbling policymaking.

21 June 2019
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