Price stability for the past three decades has been defined as a 2% inflation target, far below the elevated levels of the past year. Now, after a year of aggressively raising interest rates to bring down inflation, the Federal Reserve faces the monumental choice on when to pause its rate hikes. On ... READ MORE >
Economics
Job openings rise again in December, adding to pressure on the Fed
Labor demand surged again in December after two consecutive drops, according to government data released on Wednesday hours ahead of the Federal Reserve's rate decision. The number of job vacancies jumped to 11 million in December from 10.4 million, mostly driven by seasonal-related categories like ... READ MORE >
RSM US Manufacturing Outlook Index: Slowdown continues
The downturn in manufacturing in the United States continued in December and January, according to the RSM US Manufacturing Outlook Index. Our index has now dropped below levels of activity in previous midcycle downturns, falling from two standard deviations above normal in the summer of 2021 to ... READ MORE >
Canadian economy grew by 0.1% in November
Canada’s gross domestic product edged up by 0.1% in November, the same rate of growth as October, as tightened monetary policies continued to slow the economy. For last three months of 2022, average growth was 1.6% annualized, down from 2.9% in the previous quarter, Statistics Canada reported on ... READ MORE >
Labor costs slow, setting the stage for smaller Fed rate hike
Labor costs decelerated in the last quarter of 2022, adding to the justification for the Federal Reserve to slow its rate increases to 25 basis points after its meeting on Wednesday. The index showed that labor cost growth fell to 1.0% on a quarterly basis, and to 5.1% on a year-ago basis for all ... READ MORE >
Measuring the risk of default in the debt ceiling crisis
The standoff over raising the federal government’s debt ceiling is not the first time that members of Congress have threatened to default on payments of existing U.S. public debt. During past episodes, the policy brinksmanship has pushed up the cost of financing, caused a selloff in equity markets and ... READ MORE >
FOMC preview: Fed to slow pace of rate hikes to 25 basis points
The easing of inflationary pressures, a slower pace of consumer spending and hiring, and the moderation of wage increases are coalescing in such a fashion that the Federal Open Market Committee next week should be comfortable slowing its rate increases. We anticipate that the FOMC will increase its ... READ MORE >
American consumers grow more cautious as spending falls
American consumers pulled back on their spending for the second month in a row in December amid a continuing economic slowdown and elevated inflation. Also contributing to the decline were weak income growth and the decreasing stock of excess savings. Spending fell by 0.2% in dollar terms and by 0.3% ... READ MORE >
Initial jobless claims fall despite layoff news
New filings for unemployment benefits fell to a 10-month low last week, a stark contrast to the recent spike in reports of job losses at prominent companies. There were 186,000 new claims added, the fourth week in a row that new claims were below the pre-pandemic average, according to Labor Department ... READ MORE >
U.S. GDP: Resilient growth closes out a challenging year
A resilient American economy grew by 2.9% during the final three months of last year because of a strong increase in demand for services by consumers, fixed business investment and inventory restocking. Overall gross domestic product for the full year increased by 2.1% on an annualized basis and by ... READ MORE >