Federal Reserve Chairman Jerome Powell said in the opening statement of his news conference on Wednesday that the arrival of vaccines has bolstered the economic outlook for later this year and noted the role of monetary policy in combating the economic downturn caused by the pandemic. At the same time, Powell, in remarks following the Federal Open Market ... READ MORE >
Coronavirus
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CHART OF THE DAY: U.S. durable goods orders rise for eighth straight month
Orders for long-lasting factory goods increased in December for the eighth straight month, according to U.S. Department of Commerce data released on Wednesday. New orders for durable goods rose 0.2% to a seasonally adjusted $245.3 billion in December, following an upwardly revised 1.2% gain (previously 1%) in November. Economists surveyed by The Wall ... READ MORE >
Economic policy primer: The difference between aid and stimulus
During the pandemic, the federal government has put forward close to $3.8 trillion, or roughly 18% of gross domestic product, to offset the adverse economic impact of the public health crisis. The Biden administration has asked for another $1.9 trillion in fiscal aid and stimulus, on the back of the $908 billion that was put forward during the closing days ... READ MORE >
CHART OF THE DAY: West Coast container activity suggests an end-of-year pause in the recovery
Import activity at West Coast ports continues to anticipate robust consumer demand despite rising prices and the first hint of a pause caused by the resurgence in the coronavirus at the end of the year. Seaports in Los Angeles, Long Beach, Oakland and Seattle/Tacoma handled 22.2% more containers in December 2020 than were processed in December 2019. ... READ MORE >
U.S. precautionary savings and the coming economic expansion
Savings by American households have soared to $1.1 trillion above their long-term average from 1965 to 2020. That excess savings and near-term policy decisions around fiscal aid and stimulus will play a large role in determining the shape, scale and duration of what we expect to be the coming economic expansion. On the surface, our forecast of 5.4% ... READ MORE >
U.K. financial conditions, growth and the pandemic
Despite a surge in new cases of coronavirus infections in Britain, the RSM UK Financial Conditions Index remains 0.1 standard deviations above neutral as investors focus on what is expected to be a strong economic rebound this year. We expect growth to expand at 4.2% this year and 7% next year. It is clear that policies to address the surge in cases ... READ MORE >
FOMC preview: Addressing market rise in inflation expectations
The January meeting of the Federal Open Market Committee this week presents the central bank with an opportunity to reinforce its forward guidance, which is most likely not going to change for years. At the same time, it will provide Federal Reserve Chairman Jerome Powell the opportunity to damp down growing market sentiment around inflationary risks that ... READ MORE >
CHART OF THE DAY: Manufacturing upturn strongest since 2014
Driven in part by new orders, U.S. manufacturing output growth accelerated in January at the second-fastest rate in almost six years, according to the IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index. The index posted a reading of 59.1 in the first half of January, up from 57.1 in December, and is at a series record high. This month’s ... READ MORE >
The changing holiday shopping season
For many retailers, the recent holiday shopping season was unlike any other as they contended with the disruption of the pandemic and its effect on consumer behavior. The result was a more extended holiday shopping season this year by design. While the Commerce Department’s recent headline figure for retail sales dropped by 0.7% in December compared to ... READ MORE >
5 things to know in life sciences: Week of Jan. 18
Now that President Joe Biden has taken office, there will soon be a host of new faces in positions with significant influence over the life sciences industry, as the first item in our roundup this week explains. These include new leaders at the Centers for Disease Control and Prevention and the Department of Health and Human Services, key roles in the ... READ MORE >