There are signs that the business cycle has made a turn, bottoming out of a deep recession and moving into its next phase of sustained economic growth. As such, we have recently upgraded our forecast for 2021 real GDP growth to 7.5% (7.2% previously) on a year-over-year basis, a decline in the unemployment rate to 4.1% (4.5% previously) and an increase in ... READ MORE >
Economics
The middle market economy—often overlooked in the wake of large public companies and emerging Wall Street darlings—is the backbone of U.S. economic growth, accounting for the majority of new U.S. jobs and some 40 percent of the nation’s GDP.
CHART OF THE DAY: Spillover effects of U.S. stimulus programs on Canada’s commodity and energy prices
Financial markets are already pricing in a pickup in U.S. growth and an increase in demand for commodities and energy. This comes as U.S. vaccinations are taking off and as negotiations begin on its massive infrastructure program. With the service sector still struggling, U.S. manufacturing looks to be taking the lead on bringing the global economy out of ... READ MORE >
Labor market update: Signs of normalization as long-term challenges persist
The U.S. labor market is showing signs of optimism that might best be described as hedging its bets—confident that the vaccination program will eventually allow for the reemergence of the normal workplace, but recognizing that it may not take just a snap of the fingers to get there. The surge in job openings—which hit a two-year high—and the elevated ... READ MORE >
CHART OF THE DAY: Fracking gives Texas and New Mexico swing-state status
Crude oil prices have unquestionably crashed through their two-year downtrend. The price of West Texas Intermediate bottomed out last April and has moved consistently higher since October, reaching $60.31 per barrel in the latest trading. This last push coincides with the reopening of more fracking rigs in the Permian Basin in Texas and New Mexico, making ... READ MORE >
CHART OF THE DAY: Estimating unemployment during the pandemic
Friday’s headline U3 unemployment rate of 6.0% for February is likely an undercount of out-of-work people in the United States, not by design, but by the peculiar circumstances of the pandemic. While the topline change in net employment after adding in back revisions was 1.072 million, it will likely be later in 2022 before the economy returns to full ... READ MORE >
March jobs report blows past expectations with best still to come
An American economy about to regain its swagger after a year of pandemic-induced crisis was on full display in the March jobs report. The labor market added 916,000 new jobs and the unemployment rate declined to 6% from 6.2%. After adding in the 156,000-job upward revision to the January and February reports, the net change was an increase of 1.072 million ... READ MORE >
Reimagining redevelopment and innovation: A U.S. infrastructure bank
A confluence of events over the past four decades has created an opportunity to rethink how and where the government and private sector invest. Long-neglected investment needs have resulted in an antiquated American infrastructure that is not aligned with the needs of private industry, the public sector or the direction of the digital economy. As a ... READ MORE >
Understanding what is involved in a $2 trillion infrastructure project
The latest report card on the nation’s infrastructure from the American Society of Civil Engineers confirms what just about everyone already knows: It’s old, it’s broken and it doesn’t work anymore. To address this gap, the Biden administration has proposed spending roughly $2 trillion over the next decade. Among the initiatives are $621 billion for ... READ MORE >
CHART OF THE DAY: Rational exuberance and the RSM US Manufacturing Outlook Index
The manufacturing sector is signaling extreme confidence in a rapid end to the pandemic-induced economic shutdown and to the global manufacturing recession that preceded it. From our vantage point, this reaffirms our robust growth outlook of a 7.2% economic expansion for this year and our expectation that one million jobs will have been added to total ... READ MORE >
March employment preview: Expect a gain of 1 million jobs
Not too long ago, we estimated that the economy would generate roughly 625,000 jobs per month this year as vaccines gained broad distribution and the economy reopened. Now, with the vaccines available to most adults and economic activity returning, the economy is poised for even stronger growth. When the Labor Department releases its jobs data for ... READ MORE >