US Macroeconomic Outlook
2023-01-04
■ The sense of slowing down of corporate activities has intensified, and personal consumption has begun to show signs of slowing down.
■ Clarified long-term adherence to the policy of austerity
In the United States, the sense of deceleration of manufacturing centred business activities has increased, and the rising momentum of personal consumption which has always maintained a strong tone, has begun to show signs of slowing down. In addition, the labor market continued to weaken moderately. With the economic slowdown, the inflationary pressure has eased, but the demand for surplus labor has not been resolved, and the high inflation centred on service prices continues to exist.
Retail sales in November (core sales excluding cars, catering, building materials and gasoline, decreased by 0.2% over the previous month) were the first drop in 11 months. Mining industry production (decreased by 0.2% over the same period of last year) decreased respectively for two consecutive months, and personal consumption and production were stagnant. In terms of the labor market, some industries such as the information industry are cutting jobs, but the demand for labor in face-to-face service industries such as leisure, hotels and education remains strong continued to add more than 200000 new jobs.
In November, the core CPI excluding food and energy (up 6.0% year on year and 0.2% month on month) in the consumer price index (CPI) continued to slow down. However, the rising rate of service prices remained high. The core CPI of sticky prices calculated by the Federal Reserve of Atlanta (up 6.5% year on year) exceeded the core CPI of flexible prices (up 4.5% year on year). It can be seen that the main reason for inflation is the transfer of energy to services. On December 13-14, the Federal Open Market Committee (FOMC) decided to reduce the rate increase to 0.50%, and raised participants' expectations on policy interest rates from 2023.
The forecast of real GDP growth in 2023 has been significantly reduced to less than 1%. The Federal Reserve (FRB) is expected to continue to raise interest rates on the basis of further narrowing the range of interest rate increases, but the end of interest rate increases in the first half of 2023, when the economic downturn is clearer, will shift to a policy freeze.a