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Capital Economics

The leading macroeconomic research consultancy

US Economics Weekly

Aims to give the reader a snapshot view of both the current situation and the week ahead. It includes previews and forecasts of forthcoming events and data releases.

Sample - A domestically driven recovery

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Fed looking to change the mix rather than stance of policyBoost to spending from lower gasoline prices will be smallMoving the goal posts could dent the Fed's credibilityRecovery slowly gathering momentum as fiscal drag fadesWhat's behind the slowdown in jobs growth?New budget committee not necessarily DOACrunch timeShutdown could continue until debt ceiling deadlineThis is no way to run a countryFed fails to understand that sometimes, less is more
Labour market still strengtheningFannie, Freddie and financial repressionGlobal developments unlikely to influence Fed taperingThreat from twin deficits begins to recedeDomestic demand is building momentumFurther pick-up in GDP growth expectedLabour market resilient to slowdown in GDP growthOutlook improving for both retailers and industryQE3 tapering in September still a good betLimited economic impact from higher borrowing costs
Slower Q2 GDP growth won't change the Fed's plansThe Fed’s tapering and rate hike timetableFed responding to improving economic outlookSignificant surge in Treasury yields is still unlikelyFears about student loans still look overdoneFed struggling to explain likely evolution of asset purchasesUS making progress on deficit reductionOutlook for bank lending remains favourableFed won’t provide numerical thresholds for QE3Low inflation may concern the Fed
Slump in energy prices could provide much-needed boostWhat explains the annual spring swoon?Second quarter unlikely to be as good as the firstUS depositors unlikely to suffer same fate as CypriotsA domestically driven recoveryLabour market inflation pressures won't amount to muchRecovery picking up pace despite headwindsBusinesses shrugging off fiscal uncertaintyWill financial stability concerns force the Fed to curb QE3?Currency wars and cash hoarding concerns overblown
Surge in gasoline prices comes at just the wrong timeAre we wrong to shrug off the fall in GDP?Republicans picking their battlesPayroll tax hike will curtail consumption growth$1trn coin not a realistic optionFight over debt ceiling likely to be even worseFiscal cliff end-game still in sight, maybeFed's thresholds don't alter policy stanceHouseholds still paying down debtConcerns over student loans overdone
Rebound in house prices will reduce negative equityLower gasoline prices a timely boostFocus quickly shifts to fiscal cliff negotiationsBusinesses halt investment ahead of the fiscal cliffElection going down to the wireConsumption gaining some tractionImpact of QE3 already fadingBusiness investment stallsBurgeoning housing recovery won't transform GDP growthDebt deleveraging continues
Are things better than four years ago?Return to a gold standard neither practical nor desirableIs the fiscal cliff already dampening activity?Fiscal policy stuck between a rock and a hard placeUptick in incoming data not enough to sway the FedDrought a small, but unhelpful, drain on growthFed will do more, but QE3 is not the best optionFull nationalisation could be required to boost lendingRising dollar another drag on growthQE3 now a 50-50 call
Bernanke to take centre stageNo need to fear another recessionIndustry easing, but housing healingFed still reluctant to launch QE3Slowdown not that much of an exaggerationHouseholds snap up TreasuriesBanks benefiting from falling loan defaultsThe sizeable fiscal cliffUS economy should shrug off Greek exitFalling gasoline prices to support the recovery
Demand for credit strengtheningFed no nearer QE3...or higher ratesResilience of consumption growth may not lastThe hidden fiscal boostRecovery remains solidNo need to fret about higher Treasury yieldsDo rising equity prices offset higher gas prices?Current account deficit no concernFed still looking at ways to add to the policy mixBanking sector getting stronger
Rise in oil price not big enough to pose a threatMind the output gap trapParticipation rate will keep on fallingFederal debt burden set to keep on climbingFed may still unleash QE3 soonIndustrial revival won’t lastUS economic outlook remains modest at bestFed taking further steps into policy unknownWhat to watch in 2012Is the saving rate higher than it looks?
Slow deleveraging continuesFed to the rescue?Would US banks survive a euro collapseFew market consequences if the super committee failsDisturbing decline in demand for loansCan the Fed help revive housing?Faster GDP growth won't be sustainedFed's monetary policy framework under the spotlightTrade protection policies becoming more appealingIs the US headed for recession?
Is structural unemployment a problem?Businesses are cash rich, but reluctant to investRebound in core inflation makes Fed's life difficultPolicymakers lay out the case for more actionFed increasingly likely to launch Operation TwistHalfway through a lost decadeDeficit in demand to hinder economy for yearsFed may yet need more policy tricksRecession risks risingDowngrade, default or both?
Pick-up in GDP growth no thanks to consumersHow exposed is the US to European debt defaults?Debt ceiling impasse drags onUS external position not such a big risk to the dollarConsumers still facing a number of headwindsMisery index hits 28-year highEnd of QE2 won't drive Treasury yields higherSecond quarter shaping up to be as weak as the firstTwin threats to banks' incomeUS spends an unhealthy amount on health care
What's driven the rebound in exports?Treasury getting perilously close to debt ceilingFed still too hopeful on growthUS credit status will remain under threatGDP growth slowed to a crawl in first quarterFed still a long way from raising ratesWhat will the end of QE2 mean for the markets?First-quarter growth flaggingFed won't be swayed by higher inflationDebt limit spat has unleashed QE3 by stealth
What does $100pb oil mean for the US?Could we see a US rate hike this year?A consumption stormUnemployment rate lowered by labour force exodusHigher food prices eat into payroll tax cutFiscal outlook continues to deteriorateEconomy still years from recovering "lost" outputAre small businesses missing the recovery?Is consumption still as sensitive to house prices?Downside risks stem mainly from crippling debt