US disinflation and unemployment
![](https://assets.livewiremarkets.com/assets/avatar-fallback-51e898dd11a02a41b8c0c587dd5961a4bb20147bf4f7032bc1ef8fe2742f9016.png)
The data flow from the United States was surprisingly upbeat. The second estimate for real GDP showed a 3.7% (annualised) lift in the June quarter, up from the advance estimate of 2.3% and well above the March quarter outcome of 0.6%. This lifted average annual growth in nominal GDP to 4% in 2014/15. But nominal GDP growth has stalled for the past five years at 3-4%pa... The US Federal Reserve’s unwillingness to combat disinflationary forces has contributed to the growth stall. The core personal & consumption expenditure (PCE) price index (which excludes food & energy items) is only 1.3% higher than its level a year ago. No doubt, the Fed remains puzzled that the disinflation of the past four years has emerged at a time when the unemployment rate has declined by more than 300 basis points (see chart). So much for a ‘tighter’ labour market contributing to higher inflation. (VIEW LINK)
3 topics
![Sam Ferraro](https://assets.livewiremarkets.com/assets/avatar-fallback-51e898dd11a02a41b8c0c587dd5961a4bb20147bf4f7032bc1ef8fe2742f9016.png)
Expertise
![Sam Ferraro](https://assets.livewiremarkets.com/assets/avatar-fallback-51e898dd11a02a41b8c0c587dd5961a4bb20147bf4f7032bc1ef8fe2742f9016.png)