We expect a net increase in total employment of 950,000 and a decline to 5.7% in the unemployment rate when the Bureau of Labor Statistics releases its jobs report on Friday. Our top-line estimate stands in contrast with the consensus forecast of 875,000 for the month, which would make for a six-month average of 542,000 and a three-month average of ... READ MORE >
Coronavirus
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Honey, I shrunk the output gap: Four quarters of investment growth begin to heal the economy
The gap between the actual and potential gross domestic product narrowed dramatically during the second quarter of the year. Real GDP grew by more than 12% on a year-over-year basis while nominal GDP in current dollar terms grew at a nearly 17% yearly rate. That was enough to reduce the already shrinking first-quarter output gaps by substantial ... READ MORE >
Personal income, spending and savings are getting back to normal
Households are spending more and savings less, enjoying their summer and getting ready for school, government data released on Friday suggests. In short, households are getting back to normal. But whether that’s sustainable will probably be determined by somehow convincing all Americans to get a vaccine. In the meantime, the spending and saving ... READ MORE >
Jobless claims continue choppy descent
In the 71st week of an employment crisis, initial claims for unemployment benefits dropped again by 24,000 to 400,000 first-time claims for the week ending July 24. There remain 13.1 million people who are receiving some form of unemployment benefits. Of those, 3.2 million—or 25%—are receiving traditional unemployment benefits while 9.8 million—or ... READ MORE >
Federal Reserve policy and interest rates in 10 charts
The Federal Open Market Committee retained its accommodative policy stance on Wednesday, keeping short-term rates at the zero bound to provide liquidity for commercial activity. The FOMC said it would maintain its monthly purchases of securities to pressure long-term interest rates lower, facilitating investment. The FOMC’s decisions were an affirmation ... READ MORE >
GDP expands by 6.5% in second quarter as expansion takes hold
A global public health crisis resulting in a 31.4% decline in gross domestic product in the second quarter of last year has turned to expansion because of sustained robust fiscal aid and unorthodox monetary policy. The U.S. economy grew by 6.5% in the second quarter, marking the start of the current business cycle and the return to an above pre-pandemic ... READ MORE >
FOMC July meeting: Dovish monetary policy remains in place
The Federal Open Market Committee on Wednesday retained its policy rate at a range between zero and 0.25% as it updated its policy statement to reflect a three-month surge in inflation. The meeting came as the spread of the delta variant spurs new questions about economic growth and brings rising risks to the path of policy and the economy. While the ... READ MORE >
RSM US Manufacturing Outlook Index: Confirmation of recovery despite supply chain constraints
Despite disruption to global supply chains and increasing delivery times, orders for durable goods increased again in June, the 13th month of increases out of the past 14 months, according to Commerce Department data released on Tuesday. This is confirmation of a recovery for the sector and the end of the manufacturing recession that gripped the ... READ MORE >
Coronavirus update: The rise of the delta variant
The coronavirus is spreading once more, with daily reported cases in the United States nearly four times higher than only four weeks ago. The Centers for Disease Control and Prevention reports that because of its transmissibility, the delta variant of the virus is now responsible for more than 83% of COVID-19 infections. Sixteen weeks ago, the variant ... READ MORE >
FOMC preview: Expect more talk, less action at the July meeting
Inflationary risk and the delta variant of the coronavirus will be front and center at next week’s meeting of the Federal Open Market Committee, while policy changes will take a back seat. The primary takeaways of the meeting, should there actually be anything other than a reaffirmation of the status quo, will be the inclusion of policymakers noting the ... READ MORE >