The Federal Open Market Committee will leave its policy rate unchanged at its meeting this week, but that decision will mask an underlying shift in its economic projections and policies. Consider three areas where this shift is occurring: The dot plot, which shows committee members’ projections for the federal funds rate, will most likely pull forward ... READ MORE >
Joseph Brusuelas
What’s behind the recent decline in 10-year Treasury yields
The yield on 10-year Treasury bonds has dropped nearly 25 basis points to below 1.5%, touching 1.42% overnight on June 11 from its recent peak of 1.74% on March 31. If the initial move up to 1.74% can be rationalized as a response to the risks around higher growth and inflation, then this recent move below 1.5% in the midst of an economic recovery ... READ MORE >
CHART OF THE DAY: Initial jobless claims continue downward trend
Initial jobless claims continued to decelerate for the sixth straight week as the labor market slowly normalizes, according to government data released Thursday. State employment agencies reported 376,000 new claims for unemployment insurance for the week ending June 5, down from 800,000 claims per week earlier in the year. As claims decline, more ... READ MORE >
May CPI: Prices surge on strong base effects and economic reopening
Prices continue to rise as demand outstrips supply across a robust economic reopening in the United States. Supply chain constraints and bottlenecks are still disrupting the flow of inputs used at earlier stages of production and intermediate goods. These disruptions underscore the imbalance between supply and demand that, in addition to comparisons ... READ MORE >
RSM Canada Financial Conditions Index: Accommodation to continue while economy recovers
The Bank of Canada on Wednesday reiterated its intention to maintain an accommodative monetary policy stance as the economy continues to recover and as financial conditions remain one standard deviation above neutral. As it has for the past 16 months, the central bank is keeping its policy rate at near zero to maintain liquidity in the commercial markets, ... READ MORE >
CHART OF THE DAY: April JOLTS data shows tightening in the labor market, but it’s nothing new
The federal government's job openings and labor turnover survey data for April, also known as JOLTS, implies that while the labor market has tightened—mostly because of people dropping out of the workforce amid broad demographic and structural economic changes—this is nothing new. If anything, there is a case to be made that the risks to the economic ... READ MORE >
UK economic chartbook: Consumers gain more confidence
Mass vaccinations have stimulated a revitalization of the domestic U.K. economy in recent months, which is resulting in a rapid normalization of consumer behavior. The manufacturing sector had already begun recouping losses during the pandemic, and the increased consumer spending will aid in sustaining a recovery. This underscores our expectation that ... READ MORE >
Pandemic pressures leave women struggling to regain lost ground on jobs
During the pandemic, women have taken the brunt of the damage to the labor force, whether in the form of losing their jobs or working triple-duty at home with child care and education on top of their work obligations. Real wage differentials between men and women during the pandemic have turned into a chasm, increasing by 4.9%. The labor force ... READ MORE >
CHART OF THE DAY: Duration of unemployment suggests patience by the Fed
Among mounting signs of recovery from the pandemic and recession, it’s taking longer for out-of-work members of the labor force to find employment. It now takes almost 30 weeks on average to find a job, with a median of more than 19 weeks. Both of those measures are far above what would normally be expected in the pre-financial crisis era. As our ... READ MORE >
May employment report: Job gains accelerate, adding 559,000
The American labor market showed improved signs of life in May, adding 559,000 jobs along with an upward revision to the April figure of 27,000 jobs, putting it at 586,000. In many respects, this is a Goldilocks number—not too hot and not too cold—which should provide some relief to concerns that the economy could overheat and cause sustained ... READ MORE >