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Healthy U.S. jobs report points to early rate hike

US non-farm payroll employment rose by a healthy 178,000 month-on-month (m-o-m) in November, in line with consensus expectations. Unexpectedly, the US unemployment rate fell further in November, to 4.6% from 4.9% in October, reaching its lowest level in more than nine years. At 4.6%, the US unemployment rate is now below the median rate of […]

U.S. growth to slow in H1 2017 before rising again in H2

US GDP growth was revised up from 2.9% to 3.2% for the third quarter. The main reason was a higher estimate of growth in consumer spending. Turning to Q4, economic data published so far have been mixed. Data on consumption in October were a bit disappointing. And advance estimates for the trade deficit and inventories […]

2017 growth forecast for U.S. remains unchanged for now

Figures released on November 15 show that core retail sales in the US rose by a strong 0.8% month over month in October, well above consensus expectations. Moreover, figures for the previous months were revised up. We believe consumer spending will grow by around 2.5% q-o-q annualised in Q4 (2.1% in Q3) and that it […]

Healthy payroll number in the U.S., strong increase in wages

October’s non-farm payroll figure was healthy, with upward revisions for the previous two months. The unemployment rate inched down and year-on-year (y-o-y) wage increases reached a fresh cyclical high. The latest data tend to strengthen the case for a Fed hike in December. Non-farm payroll employment in the US rose by 161,000 m-o-m in October, […]

ISM indices point to healthy U.S. growth in October

The ISM Manufacturing index increased modestly in October, to 51.9 from 51.5 in September, slightly above consensus expectations (51.7). However, following a sharp increase to 57.1 in September, the Non-manufacturing index fell back to 54.8 in October, below consensus expectations (56.0). The rebound in the ISM manufacturing index over the past two months confirmed that […]

Modest changes in latest Fed statement

As widely expected, the Federal Open Market Committee (FOMC) remained on hold at its policy meeting on November 2 and there were only slight modifications in the FOMC statement. The Fed modestly upgraded its assessment of inflation and provided further hints of a December rate rise, saying that the case for a hike “has continued […]

Core US inflation should rise only modestly

  Core US personal consumption expenditure (PCE) inflation remained stable at 1.7% year on year (y-o-y) in September, in line with consensus expectations. We continue to believe that core PCE inflation will pick up modestly over the coming months. Our forecast that it will reach 1.9% y-o-y by year-end and 2.1% in December 2017 remains […]

Strong U.S. GDP report conceals softness of some components

On the back of a temporary surge in exports, real US GDP grew by a strong 2.9% in Q3, above consensus expectations. Our yearly average forecasts that US GDP will grow by 1.5% in 2016 and 2.0% in 2017 remain unchanged. The robust rate of expansion in Q3 needs to put in proper context. First, […]

Soft U.S. retail data conceals healthy consumer spending

Core retail sales in the U.S. rose by ‘only’ 0.1% month on month ( m-o-m) in September, below consensus expectations. Moreover, the July number was revised down. The result was that core retail sales were almost flat (+0.3% quarter on quarter (q-o-q) annualised in Q3), much lower than the 6.9% rise seen in Q2. Nevertheless, […]

U.S. data remain mixed

According to the Bureau of Economic Analysis (BEA), real consumer spending in the US fell 0.1% m-o-m in August, below consensus expectations. However, the figure for July was left unchanged, so that between Q2 and July-August, US personal consumption grew by 2.9% annualised. Other US data published in recent days has been mixed. Pending home […]

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