Growth rates in construction employment strongly support the emerging consensus around an economic soft landing. Public policy put in place in recent years—with $300 billion going to public infrastructure and clean energy in addition to $53 billion allocated to jumpstart a semiconductor supply ... READ MORE >
Joseph Brusuelas
Dollar ascendant? Why the dollar’s dominance will not fade.
Following a decade-long rise in the dollar’s value, declarations of its end as the world’s reserve currency are in vogue. With the days of zero interest rates giving way to higher rates, elevated inflation and rapidly changing rules of trade, is there anything to this talk? Our answer is ... READ MORE >
Resilient U.S. economy grows 4.9% in third quarter
Despite a bevy of headwinds, a resilient U.S. economy in the third quarter expanded at a 4.9% rate on a seasonally adjusted annualized basis and at a 2.9% rate on a year-ago basis. The top-line rise in GDP was turbocharged by strong increases in household spending, inventory building and gross ... READ MORE >
Consumer price index: Volatility in energy and gas makes price stability elusive
Volatility in energy and gasoline prices, along with stubborn housing and rent costs, were the major drivers of inflation in the September consumer price index. Both illustrate the difficulties in restoring price stability, and given growing risks to oil prices linked to the outbreak of hostilities ... READ MORE >
Excess savings are critical to the economic expansion’s duration
The American economy has shown resilience in the face of rising interest rates as consumers, bolstered by excess savings built up during the pandemic, have continued to spend. But how long can these savings last? According to our analysis of revised data from the Bureau of Economic Analysis, ... READ MORE >
Oil price increase to exert limited impact following attack on Israel
Oil prices surged following the surprise attack by Hamas on Israel and Israel’s counterstrike over the weekend. After a knee-jerk reaction upon the open of trading around the world, prices have been well behaved and should abate as the shock of the attack, as deadly as it is, abates. It is ... READ MORE >
The great rate reset: The end of easy money, rising yields and the onset of a new era
In the Federal Reserve’s September Summary of Economic Projections, policymakers indicated that the long-run neutral federal funds rate, or what economists refer to as r-star, has moved higher toward 3%. The implied logic of that forecast has prompted investors and market participants to reset ... READ MORE >
Chart of the Day: Falling oil and gas demand implies inflation relief
Easing demand for oil and gasoline should provide relief in top-line inflation in October and November. Falling wholesale gasoline prices imply a decline of 12% in retail gasoline prices in the coming weeks from its current level of $3.79 to roughly $3.34 per gallon. This is consistent with the ... READ MORE >
RSM US Manufacturing Outlook Index: Four months of improvements at risk
The RSM US Manufacturing Outlook Index continues to improve, with September’s results the fourth month of a developing uptrend. Three of the five regional Federal Reserve surveys reported increased activity during the month, while the Philadelphia and Kansas City regions reported significant ... READ MORE >
The economics of another U.S. government shutdown
The impasse over funding the federal government involves a small group of 20 hardliners in the House of Representative majority who are making demands reminiscent of 2018, when the government shut down for approximately five weeks. The traditional 12 annual appropriations bills that account for ... READ MORE >