Filtered by Subscriptions: US Economics Use setting US Economics
According to the latest data from the FDIC, US banks continued to benefit from shrinking loan losses in the second quarter, which allowed them to maintain a high capital ratio even as they expanded the size of their loan portfolios. … US Banks continue to …
29th August 2012
The fall in the Conference Board measure of consumer confidence in August suggests that households are becoming more nervous. Coming after last week’s soft durable goods orders data, this is another sign that the uncertainty generated by the euro-zone …
28th August 2012
The sharp downturn in capital goods orders suggests that the continuing euro-zone crisis and growing uncertainty about the outlook for US fiscal policy are having an increasingly marked impact on business investment. … Businesses becoming increasingly …
27th August 2012
Many Fed officials appear increasingly concerned that the uncertainty surrounding the outlook for fiscal policy is already starting to curb household and business spending. Unless Congress acts, a wide range of tax hikes and spending cuts are scheduled to …
24th August 2012
At first glance the 4.2% m/m surge in July's durable goods orders looks very impressive, but nothing could be further from the truth. This is a very weak report. The slump in core capital goods orders points to a marked weakening in business investment, …
The minutes from the last FOMC meeting at the start of this month strongly suggest that the Fed will launch a third round of quantitative easing at the upcoming meeting in mid-September. While QE3 might be successful in pushing long-term interest rates a …
23rd August 2012
Our baseline forecast for the US economy looks fairly benign, with GDP growth gradually picking up from 1.5% annualised in the second half of this year to 2.0% next year. However, we would stress that the risks to that forecast are very much skewed to the …
22nd August 2012
The annual growth rates of the narrower M1 and M2 monetary aggregates have slowed a little, but our own measure of M3, the broadest aggregate, is still growing at an annual rate of 4.5%. … Monetary Indicators Monitor …
20th August 2012
Since the Fed signalled at the last FOMC meeting three weeks ago that it was poised to act, the incoming economic data have, somewhat ironically, suddenly started to improve. Despite the recent uptick, however, the Fed is still not making any progress …
17th August 2012
The further decline in CPI inflation to a 20-month low of 1.4% in July, from 1.7%, gives the Fed even more flexibility to act next month, if it feels the economy needs a little more stimulus to drive the unemployment rate lower. … Consumer Prices & …
15th August 2012
The sharp 0.8% m/m rebound in retail sales in July was the first increase in four months, but only reversed the declines in the previous two months. So although consumers might have loosened their purse strings somewhat, given that sales are only …
14th August 2012
The near-quadrupling in student loan debt over the past decade to $900bn, or 6% of GDP, is a concern, but we don't believe it represents a serious threat to the US financial system or that it will prevent a recovery in the housing market. … Are student …
13th August 2012
The loss of corn and soybean crops caused by the drought may reduce annual GDP growth by less than 0.1%. The drought is therefore not a disaster for the wider economy. But it doesn’t help when the full impact on US exports from the recession in the …
10th August 2012
The sharp narrowing in the trade deficit in June suggests that the easing in global demand and the strengthening in the dollar have yet to take a major toll on the US economy. But we doubt this can last. … International Trade (Jun. …
9th August 2012
Households may be two-thirds the way through the necessary deleveraging process. What’s more, a larger proportion of the remaining deleveraging will be achieved by incomes growing rather than debt falling. So although the shackles constraining consumption …
The surge in demand for residential mortgages reported by the Fed’s latest Senior Loan Officer Survey could further encourage the FOMC to launch QE3, and perhaps some kind of Funding for Lending programme, at the meeting scheduled for mid-September. … Fed …
7th August 2012
We now think that the Fed will provide more policy stimulus when the FOMC next meets in September. The most likely scenario is a third round of asset purchases (QE3), this time focusing on mortgage-backed securities rather than Treasuries. But we think a …
3rd August 2012
The bigger than expected 163,000 increase in non-farm payrolls in July, up from a muted 64,000 in June, will ease fears that the US economy is following Europe into recession. If this proves to be the start of a run of stronger data, could yet convince …
The Bank of England’s new Funding for Lending Scheme (FLS) got underway last week. If the FLS doesn’t work, more radical action to boost bank lending will be needed. … Full nationalisation could be required to boost …
We no longer believe that US economic growth will accelerate as much next year. The continued drag from the crisis in the euro-zone and the risk that America hits a fiscal cliff at the end of this year means GDP growth next year is more likely to be 2.0% …
2nd August 2012
The more we think about this from the perspective of what the Fed is ultimately trying to achieve, the more we're convinced that the best option would be a cut in the interest rate payable on excess reserves combined with the launch of a new "Funding for …
Despite acknowledging the evident slowdown in US economic growth, the Fed declined to take any additional action at the conclusion of the two-day FOMC meeting today. It did, however, offer a hint that it might be prepared to do more at the next meeting in …
1st August 2012
The soft ISM manufacturing report for July suggests that the economy will continue to grow at the sub-par annualised rate of around 1.5% in the third quarter. While this is not fast enough to reduce the unemployment rate, it is not obvious that it is weak …
The rebound in the Conference Board's measure of consumer confidence to a three-month high of 65.9 in July, from 62.7 in June, suggests that the positive impact from the recent rally in equity prices outweighed the negative from the uptick in gasoline …
31st July 2012
The economy does not have a “stall speed” of between 1.5% and 2.0% that means whenever growth falls below this rate a recession is imminent. This is especially the case when the economy current has so much spare capacity. As long as any euro-zone break-up …
The recent increase in the dollar, to close to a two-year high against the euro, represents another headwind for US exporters when they already have to contend with the easing in demand in Europe and parts of Asia. What’s more, it may exacerbate the …
27th July 2012
The 1.5% annualised rise in GDP in the second quarter shows that the economy has lost a fair amount of momentum this year. Nonetheless, the recent run of data probably hasn’t been quite weak enough to prompt the Fed into launching QE3 at next week’s …
Our econometric model suggests that non-farm payroll employment increased by around 100,000 in July, which would be slightly better than the 80,000 gain in June. This would still mean that employment is not growing at a rate fast enough to reduce the …
26th July 2012
June’s durable goods orders figures provide a upside risk to our forecast that GDP grew at an annualised rate of 1.5% in the second quarter, but not one large enough to warrant changing the forecast. More generally, the data suggest that businesses are …
As it stands at the moment, the incoming news has probably not been quite weak enough to prompt the Fed into providing more policy stimulus, such as a third round of asset purchases (QE3), at the meeting that concludes next Wednesday. … Economy not weak …
25th July 2012
The economic slowdown that began in the spring months has continued into the summer. We estimate that GDP grew at an annualised rate of around 1.5% in the second quarter, down from 1.9% in the first. And the further falls in the ISM activity indices in …
24th July 2012
The drought in parts of America is unlikely to have a major economic impact. At most, the resulting rise in agricultural commodity prices will reverse only a small part of the recent fall in inflation and the decline in agricultural output will reduce GDP …
It is a very close call as to whether the Fed will launch a third round of large-scale asset purchases in the second half of this year. We expect growth to continue slightly below the economy's potential rate. At best, the unemployment rate will edge …
20th July 2012
Joining the dots, it is becoming clear that the Fed, and its Chairman Ben Bernanke in particular, are considering launching a US version of the Bank of England's new Funding for Lending Scheme (FLS), which is designed to boost the volume of UK bank loans …
18th July 2012
Fed Chairman Ben Bernanke acknowledged in his congressional testimony today that the incoming economic data had been "generally disappointing", but offerred no hint that the FOMC was close to launching a third round of large-scale asset purchases. …
17th July 2012
Consumer prices were unchanged in June and the annual inflation rate remained at 1.7%, underlining that the Fed can afford to focus its monetary policy on the slowdown in the real economy. Even though manufacturing output rebounded in June, the level is …
The various monetary aggregates show broad money growth is both strong and stable which, at the margin, makes a third round of quantitative easing look less warranted. In contrast, our own M3 measure was still contracting when the Fed announced QE2 in the …
The latest confidence data suggest that although consumers remain cautious, at least they aren't panicking. Elsewhere, the modest 0.1% m/m increase in producer prices in June is another illustration that the Fed doesn't need to worry about inflation, at …
13th July 2012
This week's congressional testimony from Fed Chairman Ben Bernanke will be closely watched for hints that the FOMC is any closer to launching a third round of large-scale asset purchases. Even though the incoming economic data has deteriorated further …
The modest narrowing in the trade deficit to $48.7bn in May, from $50.6bn, was mainly due to a price-related drop in the cost of imported oil, so there is no reason to believe that second-quarter real GDP growth was any stronger than the 1.5% to 2.0% …
11th July 2012
Two data releases this morning offered only limited support to the claim made yesterday by Richmond Fed President Jeffrey Lacker that the economy is already close to full employment. … Unemployment a cyclical rather than structural …
The fairly sharp decline in the NFIB's latest small business optimism index suggests that it isn't just larger export-orientated firms that have seen a drop off in demand over the past few months. … Small business confidence …
10th July 2012
Although it is very clear that the US economy has lost a lot of momentum, there are no real indications that it will soon come to a complete standstill or even go into reverse. The latest ISM surveys and various leading indicators are certainly consistent …
9th July 2012
The 80,000 rise in payroll employment in June provides further evidence that the US economy has lost momentum since the turn of the year, but that the recovery is not grinding to a complete halt. … Employment Report …
6th July 2012
The slowdown in Europe has been a greater drag on the US economy than the softening in China. With the euro-zone on the cusp of a deep recession, this trend will only become more pronounced. The direct hit to US GDP growth may be fairly small. …
5th July 2012
There are a couple of reasons why the plunge in the ISM manufacturing index in June may be overplaying the extent of the recent slowdown. Even so, the clearer signs that events in Europe and China are becoming a greater drag on the US support our …
3rd July 2012
The fall in June’s ISM manufacturing index to below 50 for the first time since the last recession is the surest sign yet that the US is catching the slowdown already underway in Europe and China. But the index does not suggest that another recession is …
2nd July 2012
It is striking just how quickly the easing in demand in Europe and certain parts of Asia has taken a toll on America’s industrial recovery. Thankfully, other parts of the economy have been affected by less, with the housing market in particular continuing …
29th June 2012
The sharp deterioration in America’s net international investment position last year could be alarming as this is a key indicator of future financial crises. But a closer inspection shows that the US is a long way from being tarred with the same brush as …
28th June 2012
Our econometric model suggests that at least some of the recent softening in jobs growth was reversed in June, with non-farm payroll employment rising by around 125,000. That would be almost twice as large as May's 69,000 increase, but would still …
