Author Archive

US labour market going strong

We particularly like job openings data as an indicator for a turning point in the US macroeconomic cycle, even though this series has not much history (data start in December 2000), and in spite of its long lag to release (we just had data for August, i.e. it is more than two months old now). […]

US inflation remains modest, but tariffs will soon make themselves felt

Core consumer-price index (CPI) inflation rose a modest 0.12% month on month (m-o-m) in September, again undershooting market expectations, and the year-on-year (y-o-y) print stayed unchanged at 2.2% – a relatively benign outcome given the flourishing US economy and the tight labour market. Core inflation (excluding energy and food prices) was abnormally buffeted by a […]

Fed rate decoupling

Fed likely to keep tightening while buoyed by a solid domestic backdrop Looking at the Federal Reserve (Fed) from the other side of the Atlantic, the question is really to what extent the Fed can continue to ‘decouple’ its monetary policy from other main global central banks, including those in Europe. The three-month Treasury bill […]

Hurricane aside, US job market is still very solid

Setting aside the impact of the hurricane that hit the Carolinas (and also the headline payroll reading as a result), the US jobs market remains in very good shape. Today’s data showed the unemployment rate dropped to its lowest level in 48 years in September (3.7%). Importantly, the nonfarm payrolls reportshowed strong employment gains in […]

Extraordinary times for the US economy

We have long-highlighted how solid the US economy is, in line with our ongoing scenario of 3% GDP growth for the year. That strong corporate investment is driving this offers still better news, given its potential to ultimately feed stronger productivity growth. Another positive lately is that US firms’ solid optimism about investment is coupled […]

Fed rate hikes well into 2019 may be on the cards

As widely expected, the Fed hiked rates another 25bps on 26 September, continuing its routine of raising rates by 25bps each quarter. The Fed displayed optimism about US growth prospects. Chairman Powell said that the US was in a bright spot that was expected to last. This optimistic tone was echoed by a rise in […]

US corporates happy, and investing

The torrent of coverage about trade tensions hides an important positive development: US corporate investment is flourishing, and there are increasing signs this upswing in capital expenditure (capex) could persist. This could in turn mean that the US business cycle has further room to run, despite its advanced age, and that recession is still some […]

Kicking the tyres

US President Donald Trump has shown a particularly strong interest in the US car industry – which carries both significant symbolic and political weight – and therefore in trade flows of foreign cars into the US. The recently negotiated trade agreement with Mexico is mostly about car manufacturing, particularly aimed at halting the ongoing displacement […]

Fed preview: raising the ceiling

The Fed is very likely to raise rates by 25bps on 26 September, dismissing the trade war risk and emphasising the strong domestic economy and healthy job market instead. With a rate rise widely anticipated, the focus will be on any signals about future rates. We expect Chairman Jerome Powell’s press conference and the update […]

Throw the textbook away: US inflation is still modest

Core CPI inflation was relatively modest in August, rising only 0.08% month on month, while the year-over-year (y-o-y) rate slowed to 2.2% from 2.4% in July. Core inflation was up only 0.08% m-o-m, and the y-o-y reading slowed to 2.2% from 2.4% in July. This means that for all its recent strength of the economy […]

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