After a lengthy period of outsized gains, the American labor market is now cooling in a gradual and orderly fashion in line with the Federal Reserve’s goals, which points to a growing probability of a soft landing for the economy. The 187,000 net change in total employment in July, which was ... READ MORE >
Joseph Brusuelas
Fed survey of loan officers shows rising impact of higher interest rates
The Federal Reserve’s latest survey of bank loan officers confirms that the dampening effect of monetary-policy tightening on borrowing and lending continued in the second quarter. This implies that the residual impact of interest rate increases and the banking turmoil that engulfed local and regional ... READ MORE >
RSM US Manufacturing Outlook Index: A continued decline in July
The RSM US Manufacturing Outlook Index moved sideways in July as manufacturing firms in four of the five Federal Reserve regions again reported outright declines in activity as well as declines in new orders. Only the New York region reported increased activity and a rise in new orders, and ... READ MORE >
RSM US Financial Conditions Index moving toward neutral
Having weathered turmoil in the banking sector and the standoff over the debt ceiling, financial conditions in the United States are easing, moving toward levels of risk normally priced into financial assets. But while signals from the equity market are positive, the bond market continues to ... READ MORE >
Where are we going to find the workers? A look at child care and the workforce
Recent changes in public policy are beginning to affect the domestic economy. One sign is the strong increase in manufacturing construction linked to the bipartisan Infrastructure Investment and Jobs Act and the CHIPS and Science Act. But with the unemployment rate at 3.6% and the ... READ MORE >
Resilience defined as American economy continues to defy expectations
Looking for a working definition of resilience? Take a look at the American economy, which expanded at a 2.4% seasonally adjusted annualized rate in the second quarter (2.6% on a year-ago basis). Driving that growth was a durable American household, which boosted consumption by 1.6% between ... READ MORE >
FOMC policy decision: The time for an end to rate hikes has arrived
The Federal Open Market Committee increased its policy rate to a range between 5.25% and 5.5% at its meeting on Wednesday. While the September, November and December meetings remain live options for more rate increases, we think that Wednesday’s hike is the final step in a two-year effort to ... READ MORE >
Surging manufacturing construction: Industrial policy and U.S. semiconductors
For the past half century, the political economy of the United States has rested upon a foundation of free markets and trade, and a federal government that refrains from picking winners and losers when it comes to domestic investment. The exceptions to that rule have revolved around national security ... READ MORE >
U.S. second-half economic outlook: Muddling through
The resilient American economy refuses to go gentle into that good night. The evidence is growing stronger: A rapid decline in inflation amid robust hiring and an unemployment rate that stands at 3.6% despite a steep rise in interest rates. That reality, reflected by what looks to be ... READ MORE >
Inflation slows to 3% in June but the Fed’s work is not done
Disinflation across the economy driven by easing goods and some service costs is good news for beleaguered households that have had to bear the burden of both inflation and interest rate shocks in recent years. The 3% year-ago increase in the consumer price index reported by the Labor ... READ MORE >