Long Run Views
The United States appears to be generating better growth these days when compared to estimates of its potential. The graph below shows how the United States’ output has risen by more than the potential growth estimated by the Congressional Budget Office. For seven quarters in a row, the economy has produced a higher growth rate than potential, which is absorbing excess capacity. As this happened, the unemployment rate fell to near 5% from 10% back in 2009. The total number of hours worked has expanded by 10% over that period as more jobs were added than lost. Capital investment has…
This week: The Federal Open Market Committee (FOMC) will make an announcement Wednesday at 2:00 p.m. Eastern Time, with a press conference to follow. Greek negotiations continue. May industrial production data due out today (expectation +0.3%). Macro View This week will bring the Federal Reserve Board’s (Fed) next move into focus as they announce its latest policy decision on Wednesday (forecasts updated and press conference to follow). Ultimately, we expect the Fed to continue toward a September hike, given the recent firming in employment and other data. Mixed views have been expressed recently from other members of the FOMC, but the…
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