Labor Market
We’ve highlighted that continued deterioration in consumer fundamentals will tip the US economy into a recession. Slower compensation growth, tighter lending standards for consumer loans and dwindling excess savings will constrain spending in an economy where…
According to Goldman Sachs’ Financial Conditions Index (FCI) financial conditions have become considerably more supportive since the fall of 2023. More recently, the index ticked noticeably lower from 99.4 earlier in August to 98.8. US equities have indeed…
It didn't take long for markets to utterly shrug off the surprise rise in July's unemployment rate. On Tuesday, the S&P 500 closed higher than it was the day before the July Employment Situation report was released. The Russell 2000 gained 5.2% since August 5…
According to BCA Research’s US Investment Strategy and US Bond Strategy services, the drivers of the structural downtrend in real interest rates include: demographic trends (declining fertility rates, longer life expectancy and a rising dependency ratio), the…
Canadian headline CPI decelerated from 2.7% y/y to 2.5% in July, the slowest pace in over 3 years. Notably, core median and trimmed-mean CPI eased further than expected, to 2.4% and 2.7% y/y respectively, 0.1 ppt below anticipations. Lower prices for travel…
The Conference Board’s US Leading Economic Index (LEI) disappointed in July, contracting 0.6% m/m from a 0.2% decline in June, below expectations of -0.4%. Meanwhile, the Coincident Economic Index (CEI) was flat. Year-on-year contractions in the LEI have…
Markets have recouped some of the losses incurred in the aftermath of the July US Employment Situation report. Was the surprise rise in the unemployment rate a false alarm? Supply-side dynamics alone cannot explain the overall rise in the unemployment rate.…
Housing starts and permits both disappointed in July. New construction contracted 6.8% m/m, from a 1.1% expansion in June. Permits, which typically lead housing starts, declined 4.0% m/m in July from 3.9% growth in the previous month. Concurrently, the NAHB…
The US unemployment rate has clocked in below 4.5% for 33 consecutive months. However, this historically low rate camouflages nascent cracks in the US labor market. Ahead of recessions, firms usually reduce the pace of hiring before they start firing. The…
According to BCA Research’s GeoMacro Strategy service, while the idea that Donald Trump would allow China to build factories in the US does not mesh with the contemporary media narrative, it would fit the historical track record. The last time that the US had…