The U.S. economy advanced at a 2.8% pace in the second quarter, exceeding RSM’s forecast of 2.4%, and was up by 3.1% on a year-ago basis. For the first half of the year, average growth was 2.1%, which should put to rest any arguments that the economy is about to fall off a cliff. Perhaps more ... READ MORE >
Federal Reserve
GDP preview: U.S. top-line growth to show solid increase
We expect a 2.4% pace of growth with modest downside risk to our forecast when gross domestic product for the second quarter is released on Thursday. The two main swing factors are inventories, which should be quite strong and are likely to make overall top-line economic activity appear stronger than ... READ MORE >
Why a strong dollar is in America’s best interests
A strong dollar is good for the American economy. Not only does a strong dollar mean that there is a healthy demand for American-made goods and services, but, perhaps more important, it’s also a show of confidence in the U.S. government and financial institutions. Like any asset, the dollar’s value ... READ MORE >
Producer prices rise 0.2%, but signs still point to lower inflation in Fed’s key gauge
Despite the producer price index coming in stronger than expected on Friday, the Federal Reserve's most important measure of inflation, the personal consumption expenditures index, should remain near zero in June when it is released on July 26. Read more of RSM's insights on inflation, the economy and ... READ MORE >
Further disinflation in the June consumer price index points to a Fed rate cut
Disinflation in energy and core goods has been the underlying inflation narrative over the past 18 months, and that continued to be the case in the consumer price index for June. Declines in gasoline prices, used cars and trucks, transportation and commodities caused a 0.1% decline in the top-line CPI ... READ MORE >
As economy cools, Fed needs to cut rates
Growth, inflation and hiring in the United States are all cooling toward a more sustainable pace, which will most likely define the second half of the year as the Federal Reserve gets ready to reduce its restrictive policy rate. While the fiscal tailwinds that have bolstered the economy are ... READ MORE >
Slower pace of hiring in June bolsters case for Fed rate cut
This is what an economy normalizing back toward long-term trends in growth, inflation and hiring looks like. In June, the American economy generated 206,000 jobs while the unemployment rate increased to 4.1%, or 4.054% when taken out to three decimal points. At the same time, wage growth eased to ... READ MORE >
Job openings rise as the labor market marches toward normalization
Labor demand remained strong in May, bolstering hirings during the month, the Bureau of Labor Statistics reported on Tuesday. Job openings edged up unexpectedly to 8.14 million from a downwardly revised 7.92 million in April. The increase in job openings is in line with our forecast for another strong ... READ MORE >
Manufacturing sector weakens in June
Manufacturing sentiment fell into contraction in June after only three months of barely growing, the Institute for Supply Management reported on Monday. As the Federal Reserve continues to hold interest rates at an elevated level, demand for manufacturing goods has been dampened for most of the ... READ MORE >
June jobs report preview: Beveridge curve implies a balanced labor market as hiring cools
The labor market and inflation have finally come into balance. As Mary Daly, president of the Federal Reserve Bank of San Francisco, said recently, the inflection point where unemployment risks could trump inflation risks “is getting nearer.” Now, the risk is that as the economy cools, hiring will slow ... READ MORE >