Does a New Eurozone Recession Threaten U.S. Growth?

It’s a perfect score for Germany’s economic reports so far this week—perfectly negative. In two days we’ve seen two macro updates for Europe’s biggest economy and in both cases the numbers were deeply disappointing. Yesterday we learned that new manufacturing orders suffered a substantially larger-than-expected decline in August, followed by today’s news that industrial output plunged 4% during that […]

Economics Isn’t Physics: Scottish Edition

Scotland is set to vote next week on independence from the United Kingdom and a new poll gives the pro-independence supporters a small edge for the first time. What’s interesting, and perhaps tragic, about the growing preference for breaking free of Britain is the apparent dismissal of the economic consequences that may arise from independence. The macro […]

Is Growth Destined to Slow?

There’s a spirited debate raging among economists about the long-run potential for growth in the US economy. Among those who expect that the future will suffer a lesser rate of growth is Robert Gordon, an economics professor at Northwestern and a member of the Business Cycle Dating Committee at the National Bureau of Research. In […]

A Surprisingly Weak Payrolls Report For August

Ouch! That stings. The private sector created substantially fewer jobs in August than expected, according to this morning’s monthly update from the US Labor Department. Private payrolls increased 134,000 last month, far below the consensus forecast that anticipated a gain of 220,000, according to’s estimate. Even worse, the August rise is the weakest so far this […]

Is the U.S. Stock Market Rally Built on Solid Ground?

The S&P 500 briefly traded above 2000 yesterday for the first time. The all-time high inspired some analysts to announce (not necessarily for the first time) that the stock market was in bubble territory. But there’s a reason for the bull market: economic growth. We can debate if the growth is sustainable or even genuine–some say it’s […]

Q3:2014 US GDP Nowcast: +2.5%

The surprisingly strong rebound in second-quarter GDP growth will suffer a substantial bout of deceleration in the third quarter, according to the Capital Spectator’s median econometric nowcast. The US economy is projected to increase 2.5% (real seasonally adjusted annual rate) in the July-through-September period, down from the 4.0% rate reported by the Bureau of Economic Analysis (BEA) […]

Risk-Off Momentum Rolls On

Treasury yields fell again yesterday, with the benchmark 10-year rate slipping to 2.43% at Thursday’s close—marking a 13-month low. More of the same is on tap at the moment: Early trading on Friday shows the yield dipping below 2.40%. Lower yields at this stage are a warning sign, of course, albeit inspired by a hodgepodge […]

Housing: The U.S. Economy’s New Risk Factor

Housing remains a weak spot for the US economy, as suggested in yesterday’snews of a surprisingly large decline in new home sales for June. The report follows last week’s update on new residential construction, which also slumped more than expected last month. On a brighter note, existing home sales, which constitute the lion’s share of transactions for residential […]

Is the Soft Housing Starts Data for June a Warning or a Sign of a Maturing Recovery?

Housing starts were surprisingly weak in June, the Census Bureau reports. The consensus forecast was looking for a modest gain to a 1.026 million annualized rate. Instead, the actual number dipped to 893,000—the lowest since last September. Newly issued permits for housing construction suffered a similar setback. In fact, housing has been a weak spot in the […]

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