Boom Before The Bust
Business activity and consumer confidence surveys are at multi-decade highs in the US, with labour market data extremely strong, while US stock markets hit all-time highs recently. Thus, the near-term outlook for the US economy looks very positive and this expansion seems set to become the longest on record next June. Nevertheless, it was somewhat surprising to hear Fed Chair Powell say that there’s no reason to think that this cycle cannot continue “effectively indefnitely”. The last guy to say this was a certain Gordon Brown in his "No more Boom and Bust" speech. That was almost exactly 10 years ago - and we're still laughing!
Elsewhere, there is a busy UK release calendar in the week ahead, the highlight of which is the publication of the ONS estimate of GDP for the 3 months to August. Leading indicators, such as the UK PMIs, point towards a continued solid pace of growth. Indeed, the consensus forecast is for strong growth in GDP of 0.6% in the period, unchanged on the rate recorded in the 3 months to July. Meantime, UK industrial production figures for August are also due out. It is anticipated that output will record a second consecutive monthly increase of 0.1%, pushing the year-on-year growth rate up to 1.0%.
In the Eurozone, industrial production statistics for August are the main release in a very sparse macro-data calendar. Output is anticipated to have risen by 0.3%, the first increase in three months. However, the year-onyear growth rate is expected to have remained in negative territory, falling to a five-year low of -0.5%.
See you next week!
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