4 min readThe Disconnect Between GDP and the Labor Market When assessing the economy, GDP and employment are the two primary gauges of its strength—but lately, they’re telling very different stories. GDP remains strong, with second-quarter growth at +3.8%, the best since 2023. The Atlanta Fed’s GDPNow model projects another solid +4% reading for Q3, fueled largely by surging investment in artificial intelligence. Meanwhile, the labor market has…
6 min readAs President Trump’s administration kicks off its second term, one of its most contentious executive orders—the mass deportation of undocumented immigrants—is already stirring debate. The policy is primarily aimed at widening enforcement of immigration laws, which could have a seismic impact on U.S. macroeconomic conditions. In this blog, we will dissect how the deportation policy…
4 min readEconomic forecasting is oftentimes an exercise in futility. Analysts with access to all the data and the best models can be no more accurate in their forecasts of unemployment and GDP than the average layperson with some conceptual knowledge. Take for instance September’s jobs report, which caught nearly everyone by surprise. Most analysts predicted non-farm…
6 min readRecent inflation readings have shown promise that price increases are returning to the Fed’s 2% target, a positive for the consumer and economy that may allow the Fed to pivot towards rate cuts. Simultaneously, consumer product manufacturers are facing a pivot of their own. Changes in consumer shopping patterns suggest that the resilience consumers touted…
3 min read Total nonfarm payroll employment rose by 175K in April, missing expectations by 68K, while the unemployment rate increased 0.10% to 3.9%. Over half of the total gain in payrolls were in the Health and Private Education industry, perhaps a signal of weaker hiring across the broader economy than the headline number would suggest. The…
3 min readHotter than expected inflation readings continued in March as headline CPI increased 3.5% year-over-year, 0.3% higher than the yearly increase seen in February, and 0.1% above expectations. Core inflation increased 3.8% year-over-year, in-line with last month’s reading, but also 0.1% above expectations. Energy and shelter prices contributed over 60% of the yearly headline increase. While…
7 min readFollowing pandemic-era supply chain disruptions, bottlenecks have become a top-of-mind subject for investors. At the center of the Fed’s tightening cycle was the soft landing—the idea that tighter financial conditions would help bring supply-and-demand into better balance, ease bottlenecks, and bring inflation toward 2% without significantly impacting growth. When last December’s Summary of Economic Projections…
4 min readTreasury Yields Surge (as of 10/3/2023) September saw Treasury yields rise to the highest levels in decades. Several factors may have led to the increase, including: Higher oil prices – both Brent and WTI are reaching new highs for the year and are close to $100 per barrel. Higher-for-longer narrative – the Fed’s updated projections…
9 min readCould potential changes in the economy from the end of the Fed’s tightening cycle lead to a higher neutral rate? Introduction With the Federal Reserve System (the “Fed”) nearing the end of its tightening cycle, the question for investors has shifted to whether rates can truly remain “higher for longer”, to quote the current in-phrase…
4 min readCPI – headline spike all energy related Headline inflation had been forecasted to increase in August as a result of the highest fuel prices so far this year. So, it came as no surprise that CPI rose +0.6% in August, which marked the highest monthly increase since June of 2022. However, markets were surprised that…