The overall cost of living remains subdued, with the Consumer Price Index rising 1.4% in January. Over the past six months, the headline inflation rate has remained muted and stands below the Federal Reserve’s 2% implicit target necessary for increased demand and sustainable growth. … READ MORE >
Global fiscal policy: Reflation led by fiscal firepower
The policy response by governments and central banks around the world has focused on the integration of fiscal and monetary policy to offset the impact of the pandemic and create the conditions for economic expansion. … READ MORE >
CHART OF THE DAY: The bond market’s assessment of governance and economic risk
The yield on 10-year Treasury bonds continues to move above 1%, reaching 1.15% last week for the first time since the end of last February, when the severity of the coronavirus outbreak was becoming apparent. … READ MORE >
RSM UK Financial Conditions Index reaches neutral – a platform for growth
Despite the dark winter caused by the global pandemic, financial conditions in England have moved in a constructive direction that can support a near-term economic recovery and expansion in 2022. … READ MORE >
CHART OF THE DAY: Official unemployment number doesn’t tell full pandemic story
Friday’s headline January U3 (official) unemployment rate of 6.3% almost certainly undercounts the number of out-of-work people in the United States, not by design, but by the peculiar circumstances of the pandemic. Our estimate implies a real unemployment rate of 7.5%, which we acknowledge could be much higher — closer to 8.5%. … READ MORE >
U.S. employment report: A weak gain in jobs and a nonvirtuous decline in the jobless rate to 6.3%
The intense debate over whether there needs to be a large fiscal stimulus package was supplemented by a weak U.S. employment report for January that saw an anemic gain of 49,000 jobs while 406,000 people exited the workforce. … READ MORE >
CHART OF THE DAY: An impending end to the trade downdraft
Loaded import containers processed by U.S. seaports grew by an average of 20% in the fourth quarter. And export activity — which is still worrisome in terms of global economic demand — was down less than 2% over the last three months of the year. … READ MORE >
Initial jobless claims declined to a still-elevated 779,000
First-time claims for jobless benefits declined to a still elevated 779,000 for the week ending Jan. 30, while continuing claims dropped to 4.592 million for the previous week, the Labor Department reported on Thursday. … READ MORE >
Bank of England policy rate decision: reduced economic outlook, negative interest rate policy not imminent
Reduced growth amid a more optimistic outlook later this year is the primary takeaway from the February rate decision by the Bank of England Monetary Policy Committee. This implies a slower pace of growth near 5% in 2021 followed by a rapid rebound closer to 7% in 2022. … READ MORE >
How to bridge the output gap and return the economy to full employment
Our estimate of what that will take to close the output gap and return to full employment strongly implies the need for roughly $2 trillion in fiscal aid. … READ MORE >