Pantheon Macroeconomics

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U.S. Publications

Below is a list of our U.S. Publications for the last 6 months. If you are looking for reports older than 6 months please email info@pantheonmacro.com, or contact your account rep

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productivity

29 July 2022 US Monitor July Payrolls Look Set to Confirm the Slowdown Story

Payroll growth looks to have slowed to about 250K in July, continuing the slowing trend.

The Q2 employment costs index should show that wage growth has softened markedly. 

GDP growth likely will rebound in Q3, but final demand will be weak; that matters more to the Fed.

Ian Shepherdson (Chief Economist and Founder)U.S.

7 July 2022 The June Minutes are Out of Date Already, Three Weeks is a Long Time

The June FOMC minutes talk of a second quarter growth rebound and upside inflation risks...

Things change quickly in three weeks, and we think 50bp is in play this month.

Jobless claims likely nudged up a bit last week, but look out for volatility over the next few weeks.

Ian Shepherdson (Chief Economist and Founder)U.S.

6 June 2022 Solid Payrolls, Rising Participation and Slower AHE = Happier Fed?

Payroll growth has slowed but is still strong, and is being accommodated by rising participation.

The moderation in wage growth looks increasingly real, and it will reduce sequential price pressures.

The next two CPI reports and June labor data are key; the Fed could yet pivot to 25bp in July.

Ian Shepherdson (Chief Economist and Founder)U.S.

31 May 2022 Four Reasons to Expect Core Inflation to Plunge Over the Next Year

We think markets and the Fed are too cautious on the question of how quickly core inflation will fall...

Slower wage gains, margin compression, housing weakness and the strong dollar will depress inflation.

The Fed has to keep hiking, but it can pivot to 25bp in July, and the inflation panic narrative will soon fade.

Ian Shepherdson (Chief Economist and Founder)U.S.

5 May 2022 Another 50bp Hike Likely in June, but then Bets are Off as Inflation Falls

Two more 50bp hikes expected by Mr. Powell, but once inflation is falling, back to 25bp moves…

…This will happen sooner than markets expect; by the July meeting, inflation will have dropped sharply.

First quarter productivity likely fell sharply, but these data are wild; we remain medium-term optimists.

Ian Shepherdson (Chief Economist and Founder)U.S.

29 Apr 2022 Economic Growth will Rebound in Q2, the Fundamentals are Solid

The dip in first quarter GDP hides solid consumption and investment numbers; ignore the noise.

Growth likely will rebound strongly in the second quarter; 5% or better is a decent starting assumption.

A further moderation in ECI wage growth is a good bet for Q1, implying easing core-core inflation risk.

Ian Shepherdson (Chief Economist and Founder)U.S.

11 Apr 2022 Will High Rent Inflation be Offset by Retail Margin Compression?

High rent inflation does not preclude a return to 2% core CPI inflation next year…

…Retail margin compression, post-Covid, could easily drive negative inflation in some key components.

Vehicle inflation likely will be below zero by late summer, but margins are vulnerable elsewhere too.

Ian Shepherdson (Chief Economist and Founder)U.S.

4 Apr 2022 Payroll Growth is Slowing, but it's Still Solid; Wage Gains Moderating?

  • Payroll Growth is still Strong and broad, but the trend likely will moderate as previous peaks draw nearer
  • Participation continues to increase, suggesting that the period of peak supply/demand imbalance is over.
  • Wage growth looks to be moderating, but a 3.6% unemployment print signals a 50bp hike next month.

Ian Shepherdson (Chief Economist and Founder)U.S.

29 Mar 2022 50bp is Priced-in for May, but Four Reports Could Keep the Fed at 25

  • Markets are convinced the Fed will hike by 50bp on May 4, but it's not yet a done deal…
  • Downside risks to payrolls, core CPI, GDP, and the ECI could yet persuade the Fed to tread cautiously.
  • Would the Fed hike by 50bp if the economy shrank in Q1, and March payrolls were zero?

Ian Shepherdson (Chief Economist and Founder)U.S.

24 Mar 2022 Do Rising Real Yields Signal Fading Faith in the "New Normal"

  • Real yields have risen recently by much more than breakevens; is faith in the "new normal" crumbling?
  • If productivity growth is mean-reverting to 2%-plus, real yields have much further to rise.
  • Downside risk to headline February durable goods orders, but the the core should be solid.

Ian Shepherdson (Chief Economist and Founder)U.S.

17 Mar 2022 The Fed's Intent is Clear, but Risks Abound, in Both Directions

  • The Fed's plan to hike seven times this year is based on inflation forecasts which look too bearish…
  • …But longer-run rate forecasts look too optimistic; perhaps because no one now wants to talk about r*.
  • Retail sales data show consumers not fazed by Omicron; downside risk for February IP data today. 

Ian Shepherdson (Chief Economist and Founder)U.S.

16 Mar 2022 Look for Five or Six 2022 FOMC Dots, but no Runoff Announcement Yet

  • Rates to rise by 25bp today, with five dots, at least, likely for 2022 as inflation forecasts rise...
  • Chair Powell will repeat his willingness to hike more quickly if needed, but no runoff announcement yet.
  • February's core retail sales numbers likely were were OK; headline constrained by a drop in auto sales.

Ian Shepherdson (Chief Economist and Founder)U.S.

11 Mar 2022 Inflation will Start to Fall in Q2, but How Far, and How Fast

  • Headline and core inflation will peak in March; the key question now is the speed of the subsequent drop.
  • The Fed needs to see falling vehicle prices, slower wage gains and improving supply chains.
  • These are all reasonable bets, but they aren't certain in terms of both timing and extent.

Ian Shepherdson (Chief Economist and Founder)U.S.

4 Mar 2022 February Payrolls Look Solid, but Forecast Margins of Error are Wide

  • The Homebase data suggest February payrolls rose about 600K, but the margin or error is very wide.
  • Wage growth recently has been much too strong for the Fed's comfort, but rising labor supply should help.
  • The third straight drop in the ISM services index was disappointing, but a March rebound is a good bet.

Ian Shepherdson (Chief Economist and Founder)U.S.

3 Mar 2022 The Fed is on Course to Start Tightening, but will be "Nimble"

  • Chair Powell sticks to the tightening story, while ac-knowledging uncertainty due to the Ukraine war.
  • The unwinding of the Omicron hit should mean lower claims and stronger ISM services today.
  • The auto sales rebound is stalling, but Q1 sales still on course to rise by more than 40%, annualized.

Ian Shepherdson (Chief Economist and Founder)U.S.

14 Feb 2022 Markets Expect too Much from the Fed in 2022, but not Enough Later

  • Markets are becoming too aggressive on the likely pace of Fed tightening this year...
  • ...But they aren't aggressive enough on the question of the terminal rate, given rising productivity growth.
  • They won't start to talk about rising r-star until much later this year, once the current inflation spike is over.

Ian Shepherdson (Chief Economist and Founder)U.S.

7 Feb 2022 Faster Wage Growth Matters More to the Fed than January's Payroll Gain

  • The upward revisions to wage growth will be deeply unwelcome at the Fed; expect more hawkish talk.
  • Rate hikes at the next three meetings are a decent bet; the Fed needs to send a clear signal.
  • Omicron has hit demand but not payrolls; that could yet change in February.

Ian Shepherdson (Chief Economist and Founder)U.S.

4 Feb 2022 Omicron Noise Looks Set to Swamp the January Payroll Signal

  • The signal from January payrolls is likely to be drowned out by the noise; February too?
  • Participation and the unemployment rate are wild cards too, but the risk to wages is to the upside.
  • Productivity growth appears to have stabilized at about 2%; that's OK, but we expect better ahead.

Ian Shepherdson (Chief Economist and Founder)U.S.

3 Feb 2022 Productivity Noise is Drowning the Signal, but the Outlook is Good

  • Productivity growth rebounded in Q4, but the more important point is that the outlook is very bright...
  • ...Stronger productivity growth over the medium-term would boost real incomes and corporate earnings.
  • The Omicron hit means downside risk to today's ISM services index; expect better in February.

Ian Shepherdson (Chief Economist and Founder)U.S.

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