Money Supply

Reading the jobs report through the Fed’s eyes

Robin Harding — Fri, 07 Jun 2013 14:57:54 +0000

When the Fed began its third round of quantitative easing last autumn, the most recent jobs report in hand was for August, which showed an unemployment rate of 8.1 per cent. Today the unemployment rate is 7.6 per cent. The Fed said it would keep buying assets, currently at a pace of $85bn-a-month, until there is a “substantial improvement” in the “outlook for the labour market”. The question is whether the current data meet that condition or at least bring it close enough that the Fed can start to taper its purchases.

Key points from the ECB press conference

Michael Steen — Thu, 06 Jun 2013 15:50:37 +0000

Last week anti-capitalist protesters outside the European Central Bank were dominating (at least the local) news in Frankfurt, this week it was the turn of the policymakers inside the building. The ECB is keeping its rates on hold at 0.5 per cent and Mario Draghi, president, has been quizzed on where the eurozone is headed.

The ECB staff’s quarterly economic forecasts have been tweaked, so this year’s contraction is greater than previously forecast at 0.6 per cent and next year’s growth forecast creeps up to 1.1 per cent (but then a year is a long, long time in economic forecasting.)

What else have we learnt?

Live blog: ECB rate decision and press conference

Claire Jones — Thu, 06 Jun 2013 11:37:47 +0000

Hello and welcome to the FT's live blog on the European Central Bank's monetary policy decision and press conference. All eyes are on the ECB as policy makers wait for an improvement in the eurozone’s recession-bound economy. By Claire Jones and Lindsay Whipp in London.

The governing council's vote is due at 12.45 (BST) and ECB President Mario Draghi will meet the press at half past one.

Early bird specials and US growth

Robin Harding — Wed, 05 Jun 2013 16:46:27 +0000

(1) There is no need to panic. After the purchasing managers’ index for manufacturing came in below 50 on Monday there was some cause to worry about the health of the economy – but the rise in the services PMI, from 53.1 in April to 53.7, suggests that consumer demand is still there.

Consistency and King’s Desert Island Discs

Chris Giles — Fri, 31 May 2013 10:45:11 +0000

Consistency and being boring have always been close to Sir Mervyn King’s heart. So, speculation over the tunes the departing Bank of England governor will pick when he appears on BBC Radio 4′s Desert Island Discs on Sunday is misplaced. Unlike the economy, Sir Mervyn’s history does not change and his choices should be entirely predictable.

Here goes for five of his eight choices:

A sensible IMF back-down

Chris Giles — Wed, 22 May 2013 11:00:44 +0000

In April, the International Monetary Fund positioned itself to go head-to-head with the UK government over its fiscal stance. The fund said it wanted Britain to consider slowing deficit reduction and Olivier Blanchard, its chief economist, said the country was “playing with fire”.

A month later, the considered view of the IMF is much more nuanced. Here are the five things you need to know about the fund’s retreat.

You can take my Pfennigs, but the cent stays

Michael Steen — Tue, 21 May 2013 15:42:03 +0000

Small change

Search the pockets, wallets, purses, car cigarette ashtrays and homes of anyone in (almost) any eurozone country and you are likely to find significant heaps of small, brown iron-and-copper 1 and 2 euro cent coins.

They cost more to make than they are worth, there’s precious little you can buy with them (though the German post office does sell a €0.03 stamp) and they tend to accumulate in drawers and on flat surfaces at an alarming rate. So, one might reasonably ask, why not just get rid of them?

BoE makes rulers redundant

Claire Jones — Wed, 15 May 2013 18:08:24 +0000

One of the few occasions when I’ve used a ruler since leaving school is during the Bank of England’s inflation report press conferences. I’m not alone — for years a ruler has been an essential tool for those trying to fathom what monetary policy makers thought was going to happen to growth and inflation in the months and years ahead.

The BoE’s practice of waiting a week between releasing its quarterly fan charts for growth and inflation and the data underlying them left bank-watchers with little choice but to dig out the ruler to work out where the MPC thought growth would be in, say, 2014. As Chris Giles commented here, there were several problems with this approach.

Now, thanks to the Stockton Review, reporters need no longer remember their rulers (hat tip to George Buckley at Deutsche Bank for the headline of this post).

Inflation report in five bites

Chris Giles — Wed, 15 May 2013 14:11:39 +0000

If you read today’s Bank of England inflation report, you will notice some welcome changes. More will follow on this blog about the improvements in BoE transparency. In the meantime, the five things you need to know about the bank’s economic outlook are:

Five quick takeaways from the eurozone GDP numbers

Michael Steen — Wed, 15 May 2013 11:40:12 +0000

You still need a strong constitution or a taste for gallows humour to read most eurozone economic statistics, as today’s release of the preliminary Q1 gross domestic product ~~growth~~ contraction data shows.

The bloc is now in its longest recession since the birth of the single currency, beating the post-Lehman Brothers slump in duration, though not in the depth of the downturn.