US Economic Update – September 2014

Indicators remain generally positive, consistent with our forecast of solid, above trend, growth of 3.0% qoq (annualised) in the September quarter.
While August’s employment gain (142,000) was below expectations, the recovery in the labour market remains on track.

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  • Indicators remain generally positive, consistent with our forecast of solid, above trend, growth of 3.0% qoq (annualised) in the September quarter.
  • While August’s employment gain (142,000) was below expectations, the recovery in the labour market remains on track.
  • When the Fed starts raising the fed funds rate (which we expect in the June quarter 2015), it will continue to target a range. The Fed is likely to set the interest rate on excess reserves at the top of the range, and the rate for its overnight reverse repurchase agreements program at the bottom.

While for the most part only July data are available for the September quarter – making it too early to get a firm reading on the likely growth in the quarter – recent indicators continue to be generally positive and consistent with our forecast of solid, above trend, growth of 3.0% qoq (annualised). This is notwithstanding disappointment at the first below 200,000 employment gain since the start of the year. However, even this pace is sufficient to bring unemployment down over time.

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•    US Economic Update – September 2014 (PDF, 87KB)