The restarting of student loan repayments will not cause a large drag on overall spending or economic growth in the final quarter of the year. Despite the hype and scare tactics around a well-telegraphed restart date, we estimate that it will result in only a 0.3 percentage point drag on gross ... READ MORE >
Economics
Falling jobless claims, existing home sales offer mixed economic picture
Even as the labor market remains tight, signs of a slowdown continue to appear in different pockets of the economy. The mixed signals from Thursday's data on initial jobless claims and existing home sales added to an economic picture that resembles a soft landing when the economy bends but does not ... READ MORE >
FOMC policy decision: No rate hike as Fed implies soft landing
The Federal Reserve maintained its policy rate in a range between 5.25% and 5.5% on Wednesday while revisions to its Summary of Economic Projections strongly imply that the central bank no longer expects a recession, which it did just six months ago, and is increasingly confident of a soft landing in the ... READ MORE >
Housing starts fall to three-year low amid 7% mortgage rate
Housing starts in the United States fell by a sharp 11.3% in August, the second double-digit drop in three months, signaling more strain on the housing market because of elevated mortgage rates that exceed 7%. August's number was the lowest since June 2020 as the pandemic set in, according to Commerce ... READ MORE >
Canada inflation surges 4%, exceeding forecasts
Inflation in Canada spiked far more than forecast in August, raising the prospect of another interest rate increase by the Bank of Canada. Even though inflation was expected to increase because of rising gas prices, higher rents and comparisons to the moderate levels of a year ago, the 4% ... READ MORE >
Low core inflation should keep the Fed from hiking rates
While we expect the Federal Reserve to hold rates unchanged on Wednesday, what its updated Summary of Economic Projections will look like remains less clear. More likely than not, given the recent robust economic data, we might see higher growth and inflation reflected in the summary along with an ... READ MORE >
R-star: The role of the natural rate of interest in monetary policy and economic growth
The pandemic has spurred profound changes in the global economy like a tight labor market and elevated inflation that policymakers are only beginning to understand. But one result is clear: The days of historically low interest rates are over. Now, policymakers are wrestling with the question of ... READ MORE >
Industrial production nears a record high as consumer sentiment falls
Industrial volume in August rose by 0.4% to the highest level in 11 months, nearing the record registered last September. The increase was stronger than expected, reflecting a boost from machinery production and mining, which increased by 2% and 1.4%, respectively. Those categories account for more ... READ MORE >
August retail sales and producer inflation show a hot summer finish
The U.S. economy ran hotter than expected in August even as the momentum in spending slowed down. Retail sales and producer inflation came in significantly higher than forecast, while initial jobless claims were lower than the market consensus. But the downward revisions to retail sales in the prior ... READ MORE >
Energy pushes inflation higher but core prices remain grounded
Consumer inflation in August posted the biggest monthly increase in more than a year, driven mostly by the surge in oil and energy prices, the Bureau of Labor Statistics reported on Wednesday. But core inflation—which has more policy implications—grew slightly faster at 0.3% or 2.8% on a ... READ MORE >