Tag Archives: US economic activity

In spite of a thriving economy and driver shortages, wage growth in US haulage have been lagging, leaving economists (and Fed officials) scratching their headsDespite a huge shortage of drivers and soaring transportation costs as a result, wages in the US haulage sector have remained stuck. This illustrates the ongoing chasm between macro theory (which would suggest much stronger wages) and reality (still-tepid wage growth).While microeconomic dynamics specific to the sector might be at play...

The reversal of accommodative lending conditions and rising volatility mean we will stick to quality.While the US economy continues to grow, knowledge that we are late in the cycle means we are closely watching two developments of significance to credit markets: US corporate leverage and US Federal Reserve (Fed) rate hikes.Many indicators are pointing to rising leverage among US companies, be it the non-financial corporate debt-to-GDP ratio (which reached an all-time high of 46% in 2018), or...

US companies are showing little propensity to use healthy profits to increase their investments. We remain prudent about the outlook for US capex in the coming months.A major feature of the US growth recovery since mid-2009 has been the significant improvement in corporate profits. But improvement has been mostly achieved at the expense of investment (capex) and wage growth, which have been kept on a tight leash. This has puzzled policymakers, including the Federal Reserve, which has been...

We are cautious about the impact of a Trump presidency and are not changing our economic forecasts at this time. Uncertainty about how Trump will govern make near-term volatility spikes likely.A Trump presidency could see major changes in policy on many themes such as fiscal policy, trade policy, immigration, the environment, financial regulation, healthcare, social security, and supervision of the Fed. However, it remains highly uncertain whether Trump will in fact pursue the policies he...

The ISM indices signal a broad-based upturn in US economic activity and are consistent with our forecast of GDP growth of 2.5% in the third quarter. Figures released at the beginning of October revealed that the US ISM Manufacturing index rose to 51.5 in September from 49.4 in August, above consensus expectations (50.4). The ISM Non-Manufacturing ISM index posted its largest month over month increase on record, rising to a solid 57.1 in September from 51.4 in August.Forward-looking...