Author Archive

A December Fed rate hike is looking likely

The Federal Open Market Committee (FOMC) left interest rates unchanged at the end of its latest policy meeting on September 21. However, the Fed adopted a more hawkish tone, reintroduced in its statement a sentence saying risks in the US economy were roughly balanced, and affirmed that the case for a rate hike has strengthened. […]

Core retail sales weak in August, but U.S. consumption still healthy

Today’s US retail sales report for August was surprisingly downbeat, with core retail sales recording their second monthly decline in a row. Core retail sales in the US fell by 0.1% month over month (m-o-m) in August, worse than consensus expectations. Moreover, June and July numbers were revised down by a cumulative 0.2%. The result […]

Putting fall in U.S. business surveys into context

The ISM Manufacturing index in the US fell heavily in August. The 49.4 reading was well below consensus expectations (52.0) and its lowest level since January 2016. The Non-Manufacturing index painted a similar picture, recording its worst monthly fall since the recession of 2008-2009. It dropped from 55.5 in July to 51.4 in August, well […]

Our US scenario remains unaltered after mixed jobs report

Non-farm payroll employment rose by a modest 151,000 month on month (m-o-m) in August, below consensus expectations. Moreover, the unemployment rate remained unchanged, wage increases were soft, and the average work week declined surprisingly. However, the disappointing August nonfarm payroll number followed solid numbers in June and July. Overall, job creation has been a healthy […]

US consumption growth is on a strong footing

Data on US household consumption and income were published today (29 August) by the Bureau of Economic Analysis. Real personal consumption rose by a solid 0.3% m-o-m in July, slightly above consensus estimates (+0.2%). Previously published data on retail sales were soft, but car sales and output of utilities for July had been quite upbeat, […]

July ISM numbers show U.S. business activity remains strong

Although the ISM Manufacturing index in the US dropped back a little to 52.6 in July, it remained well above the low levels recorded at the turn of the year. The Non-manufacturing index moved back down as well but remained at relatively healthy levels. The rebound in the ISM Manufacturing index over the past few […]

US wages continue to rise at a gentle pace

The US Employment Cost Index increased by 0.6% quarter-on-quarter and by 2.3% year-on-year in the second quarter, in line with expectations. Potential domestic wage pressures in the US remain hard to analyse. The unemployment rate has fallen sharply, and most other labour market indicators have improved. Although there is much discussion about the slack remaining […]

Soft US GDP figures cause us to cut 2016 growth forecast

US GDP grew by a surprisingly soft 1.2% (quarter on quarter, q-o-q, annualised) in Q2, well below consensus expectations of 2.5%. Moreover, growth in Q4 2015 and Q1 2016 was revised noticeably lower. Year-on-year growth in Q1 was revised down from 2.1% to 1.6%. In Q2, consumer spending grew by a strong 4.2% and final […]

US retail sales solid in June, very strong in Q2 overall

Core retail sales in the US increased by 0.5% month-on-month in June, above consensus expectations. Moreover, April and May numbers were revised up by a cumulative 0.1%. The result was that core retail sales grew by a very strong rate of 7.4% quarter-on-quarter (q-o-q) annualised in Q2 2016, much higher than the 2.8% rise seen […]

Pick-up in U.S. job creation in June masks slowdown in Q2 as a whole

The US Labor Department’s employment report for June showed nonfarm payrolls rising by a strong 287,000 in June, well above consensus expectations. However, this followed a very weak number for May (11,000, revised down from 38,000). Job creation slowed noticeably in Q2 overall. Meanwhile, the unemployment rate bounced back from 4.7% in May to 4.9% […]

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