New filings for jobless claims inched up by 1.8% last week to 230,000, remaining above the pre-pandemic level for the fifth week in a row. There is no doubt that the labor market has been slowing down as more companies reassess their hiring plans. It has also become clear that the bottom in initial ... READ MORE >
Federal Reserve
U.S. service sector grows, adding pressure on Fed
The Institute for Supply Management's service index rose in November as business activities increased on the month. The unexpectedly strong purchasing managers survey data, released on Monday, added more pressure on the Federal Reserve as focuses on taming inflation, especially in services. The ... READ MORE >
U.S. economic outlook: Recession on the horizon
Our baseline forecast for the American economy next year calls for a mild recession by the second half of the year as the impact of higher interest rates sets in. For some time, our forecast has included a 65% probability of recession over the next 12 months. Next year, we expect a 0.1% decline in ... READ MORE >
U.S. jobs report: Rising wages pose a problem as hiring remains strong
Expectations that wage growth would slow were dashed inside the U.S. jobs report for November as average hourly earnings increased by 5.1% on a year-ago basis and by 0.6% on the month in addition to being revised higher in October. The primary policy takeaway from the report is that the Federal ... READ MORE >
Manufacturing sector nears contraction
The manufacturing sector grew for the 30th month in a row but barely hovered above contraction in November, according to data released by the Institute for Supply Management on Thursday. The ISM’s overall index slowed to 49%, barely above the contraction threshold at 48.7%. It was the third straight ... READ MORE >
Job openings and quits continue to moderate
Job openings fell in October to 10.3 million, continuing to signal moderation in labor demand amid the Federal Reserve's aggressive rate hike campaign. Since its peak in March, when the Fed began increasing rates, the number of job vacancies has dropped by almost 13% as the impact of the tightening has ... READ MORE >
The post-pandemic era and the end of hyper-globalization
The American economy is in the midst of a long-lasting structural change following the severe shocks unleashed by the pandemic. The hyper-globalization that has dominated the global economy over the past 30 years is giving way to an era of regionalization that is radically altering the flow of ... READ MORE >
RSM US Supply Chain Index returns to pre-pandemic level
Amid the many challenges in today’s economy, there is a bright spot: Supply chains, after a period of severe disruption, are back to normal. Our RSM US Supply Chain Index pointed to supply efficiency for the fourth month in a row, reaching 0.49 standard deviations above neutral in October. That ... READ MORE >
Housing starts and initial jobless claims give Fed mixed signals
Builders continued to pull back on the supply of new houses in October amid sharp declines in demand as mortgage rates steepened, the Census Bureau reported on Thursday. The decline came as the labor market continued to show resilience, with initial jobless claims falling unexpectedly by 4,000 to ... READ MORE >
Financial conditions update: Rising risks and tightening markets
Despite a strong bounce in U.S. financial markets following better-than-anticipated inflation data for October, financial conditions remain tight. The risk to the economic outlook has not abated after one month of encouraging consumer price index data. Central banks continue to increase the cost of ... READ MORE >