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 economy’s 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

ed for several years as an economist at a few of the large broker-dealers in New York. One of my primary functions was to maintain an ongoing estimate of growth in the nation’s GDP—a so-called GDP “bean count.” Most investors use GDP as their primary summary measure of overall economic performance, so they are keenly interested in how incoming data are likely to impact the estimates. Our running tally of GDP growth for the current quarter was one…

The U.S. economy — a gain in GDP?

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

…ound 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 from th…

Signs point to an improving U.S. economy

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

ment rate continued to move lower with November at 7.0%, down from 7.2% in September and 7.8% last January. The unemployment rate is now at the level Bernanke mentioned (only last spring) when QE would likely end. But the Fed uses broader measures to gauge health. The participation rate at 63.0% remains near its September low and the Employment to Population Ratio at 58.6% remains broadly unchanged—metrics the Fed frequently cites as sub-optimal….

Labor market takes center stage

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

Labor market issues have long taken a central role in Janet Yellen’s career. Remarks indicate Yellen views current labor market challenges as potentially very costly for the economy, and she sees a role for monetary policy in promoting recovery. Yellen’s nomination likely raises the bar for Fed tightening, as long as inflation remains low. When it comes to the current priorities for monetary policy, investors already know where Janet Yellen st…

U.S. rates — View update

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

…casts has not seemed to change despite meaningful revisions at the last FOMC meeting. As we have explained before (see here), the credibility of the Fed’s guidance beyond 2014 should be considered low, and should not alone be used to value the front-end of the yield curve, in our view. All else equal this would imply higher front-end rates—especially when combined with modest slack. Our views on this topic also remain unchanged. Overshooting: Wh…

Increasing energy independence and the U.S. economy

Columbia Management, Investment Team | May 7, 2013

…inesses. This has the potential to advantage domestic production of goods at the expense of foreign production, promoting capital flows to the United States. This has caused a beneficial narrowing in our trade deficit, making us less dependent on foreign, and perhaps unfriendly, sources of oil. The chart below shows this downshift in energy imports and the modest but steady shift higher in our energy exports. See more Market Insights from Columb…