Non-farm payroll employment rose by 195,000 m-o-m in June 2013, above consensus expectations (+165,000). Moreover, May’s figure was revised up (from +175,000 to +195,000) and April’s number as well (from +149,000 to +199,000). Net revisions therefore cumulated to a substantial +70,000. As this series on job creation is often very volatile (see chart above), we […]
Nominal personal consumption expenditure increased by 0.3% m-o-m in May, in line with consensus expectations. In real terms, consumer spending inched up by a relatively healthy 0.2%. However, the 0.1% monthly rise published initially for April was revised to a 0.1% drop. And this came in addition to the sharp downward revision for Q1 that […]
Residential construction in the US has been picking up now for over two years, with the upswing looking set to continue. Momentum has been gathering pace noticeably over the last 12 months, with building activity in the housing sector expanding by some 15% q-o-q in Q1 2013. Even after this impressive enough recovery, this demand component still only accounts for 2.6% of GDP, so […]
The FOMC appeared more confident on its relatively optimistic growth scenario. The Fed updated its growth projections. They imply q-o-q GDP growth of around 3.0% annualised in H2 2013 and of more than 3.0% in 2014. Furthermore, forecasts on the unemployment rate over the next three years were revised significantly lower. However, the main surprise […]
Europe is stuck in its longest recession since the end of World War II, and inflation rates are disconcertingly trending downwards. Our scenario for economic growth to quicken in the US in the second half of this year stands in stark contrast to what is happening in Europe. A whole raft of economic reforms are necessary in China in order […]
Essentially there are three regimes for the American currency. The depreciation regime This is the regime most frequently observed since the end of the Bretton Woods monetary system in August 1971. These phases of orderly depreciation generally correspond to periods when the global economy is expanding. Since the dollar is the currency of global trade finance, its availability in sufficient quantities […]
What contributes to economic growth is not the level of net new credit but its change. To quantify that factor, we calculate a ‘credit impulse’, which is actually the year-on-year change in net new credit, measured as a percentage of nominal potential GDP. This measure fell back noticeably in Q1 2013, but from a very […]
Three different regimes rule the US dollar: depreciation, crisis and secular uptrend. Few investors realise that we have shifted into a secular uptrend regime and this will have consequences on asset clases one should hold in a portfolio of investments. In this video, Yves Bonzon describes the regimes and asset classes to favour at the […]
Our model that attempts to explain GDP growth based on the behaviour of both ISM indices suggests that GDP growth fell to as low as around 1.6% in May, and 1.6% on average in April and May. Although soft, these findings are not pointing to anything very different from our forecast of GDP growing by […]
There are several indices measuring US house prices. The most commented on is the S&P Case-Shiller index, but our favourite is the CoreLogic home price index. This is the one used by the Fed to estimate real estate wealth, and it has the advantage of being published earlier than the Case-Shiller index. April’s figures for […]
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