Perspectives Blog

Rebalancing the U.S. economy

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | January 13, 2014

Both fiscal and monetary policy will begin to normalize in 2014 The economys performance will be an important metric for markets as growth needs to catch up The key to getting growth beyond 2% is for business to borrow to improve/expand productive capital It’s happening again—a fourth quarter bounce in economic activity that extends into the first quarter and supports the view that growth really, finally, has started to accelerate. Such bounc…

Why GDP deserves less attention

Zach Pandl, Portfolio Manager and Strategist | August 12, 2013

In our view, gross domestic product (GDP) data are deeply flawed. To form a more accurate assessment of the economy, investors should include other measurements, such as gross domestic income. Official GDP growth was relatively soft in the first half of this year, but the broader set of activity data suggests the U.S. economy is doing just fine. Before joining Columbia Management I worked for several years as an economist at a few of the large…

The U.S. economy — a gain in GDP?

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | May 2, 2013

nge-bound near 1% to 2%, but we expect 2013 will end on a slightly stronger note as these risks abate. The April 26 advance estimate of gross domestic product (GDP) released by the Bureau of Economic Analysis showed that the U.S. economy grew at an annualized rate of 2.5% in the first quarter, below expectations of an increase of 3.0%. Despite the decent first quarter advance, year-over-year gains in nominal and real GDP are largely unchanged fr…

Signs point to an improving U.S. economy

Marie M. Schofield, CFA, Chief Economist and Senior Portfolio Manager | December 9, 2013

a 57.3 in November, the highest reading since April 2011, with the employment component rising to the highest level in a year. This week also saw strong vehicle sales reports, with sales levels reaching 16.41 million (SAAR), up 7% from a year ago and the strongest in almost seven years. Factories are humming and manufacturing (notably autos) saw the best back-to-back job gains in two years. Construction also ticked stronger in both residential a…

Labor market takes center stage

Zach Pandl, Portfolio Manager and Strategist | October 15, 2013

ocused on an idea called the “efficiency wage theory”, which argues that firms set wages in an effort to promote worker morale and thereby improve productivity. For the economy as a whole this theory helps explain involuntary unemployment, because efficiency considerations move wages away from the market equilibrium. Some of her other work focused on topics like labor market turnover and the psychological effects of job loss. Yellen is also uniqu

U.S. rates — View update

Zach Pandl, Portfolio Manager and Strategist | April 4, 2014

Compared to the market consensus, our views have been more negative on three key duration fundamentals. Following recent remarks by Fed Chair Janet Yellen, we are now less confident about how to read Yellen’s policy strategy. We are still expecting higher rates; however, we now have less conviction that 3-5yr Treasuries will continue to underperform on the curve. For the last couple of months we have argued that portfolios should remain underw…

Increasing energy independence and the U.S. economy

Columbia Management, Investment Team | May 7, 2013

The U.S. petroleum trade balance has shifted. Development of domestic energy sources benefits domestic goods producers with lower costs. Energy exports modest, but on the increase. Investors should note the recent shift in the U.S. petroleum trade balance. For many decades, the United States has largely imported oil and petroleum products, widening our trade deficit and increasing our dependence on foreign energy. With the shale-gas developmen…