Independent Economist, Forecaster and Strategist

Thomas Lam

Macroeconomics

<ul>
<li>Arguably, the state of the US labor market is key to any recession call</li>
<li>Despite the ongoing rise in the unemployment rate, other labor market dynamics might be at play</li>
<li>One simple approach is to use the claims gap along with the unemployment rate to assess whether labor market conditions are deteriorating </li>
</ul>


Arguably, the state of the US labor market is key to any recession call
Despite the ongoing rise in the unemployment rate, other labor market dynamics might be at play
One simple approach is to use the claims gap along with the unemployment rate to assess whether labor market conditions are deteriorating 


Is the US Labor Market Signaling a Recession?

<ul>
<li>Market sentiment improved as the prospect of a September Fed pivot increased following the July FOMC meeting</li>
<li>While the July FOMC statement and Chair Powell's presser hinted toward a rate cut, the former seems more ambivalent than the latter </li>
<li>Although the current focus is squarely on the timing of the first rate cut, the future path of policy remains unclear at this time</li>
</ul>


Market sentiment improved as the prospect of a September Fed pivot increased following the July FOMC meeting
While the July FOMC statement and Chair Powell's presser hinted toward a rate cut, the former seems more ambivalent than the latter 
Although the current focus is squarely on the timing of the first rate cut, the future path of policy remains unclear at this time


Fed Snap (Jul 31 Meeting): Current & Future Takeaways

<ul>
<li>My hybrid G3 nowcasting framework harnesses varied inputs from US, Euro Area (both through June) and Japan (mostly through May)</li>
<li>Although 2Q 2024 headline GDP growth for the G3 overall is tracking better, 3Q might be soggier   </li>
<li>The individual nowcasts imply prospective upside risk for Japan in the near-term, and perhaps emerging downside risk for the US and Euro Area in the offing</li>
</ul>


My hybrid G3 nowcasting framework harnesses varied inputs from US, Euro Area (both through June) and Japan (mostly through May)
Although 2Q 2024 headline GDP growth for the G3 overall is tracking better, 3Q might be soggier   
The individual nowcasts imply prospective upside risk for Japan in the near-term, and perhaps emerging downside risk for the US and Euro Area in the offing


Almost Half of Global GDP Tracking Unevenly

<ul>
<li>Central bankers in advanced economies, while pausing, cutting and hiking, continue to debate underlying or trend inflation developments </li>
<li>My estimate of underlying inflation for the G3 overall, which zeroes-in on the Most and More Persistent categories, trended lower recently  </li>
<li>The estimated level of underlying G3 inflation in May was approximately 1%-point above the pre-pandemic average</li>
</ul>


Central bankers in advanced economies, while pausing, cutting and hiking, continue to debate underlying or trend inflation developments 
My estimate of underlying inflation for the G3 overall, which zeroes-in on the Most and More Persistent categories, trended lower recently  
The estimated level of underlying G3 inflation in May was approximately 1%-point above the pre-pandemic average


Is Underlying Inflation Edging Higher, Lower or Flatlining?

<ul>
<li>Since the FOMC decision to remain on-hold in June was unsurprising, the emphasis was on the accompanying statement, dotplot and presser </li>
<li>The post-meeting statement tilted somewhat dovishly, but the 2024 median dot skewed more hawkishly</li>
<li>While a July rate cut remains remote, the odds of a September or November pivot have increased following the June FOMC </li>
</ul>


Since the FOMC decision to remain on-hold in June was unsurprising, the emphasis was on the accompanying statement, dotplot and presser 
The post-meeting statement tilted somewhat dovishly, but the 2024 median dot skewed more hawkishly
While a July rate cut remains remote, the odds of a September or November pivot have increased following the June FOMC 


Fed Snap (Jun 12 Meeting): Current & Future Takeaways

Tom has over two decades of experience in the realm of economics and finance, with expertise ranging from covering the global economy, deciphering financial markets, including macro forecasting, to advising on investment strategy.

He commenced his career in New York, initially at a large money-center bank and then at a hedge fund.  Thereafter, while in Singapore, he worked at two financial institutions and later joined academia.  

Tom has been consistently ranked among the top five most accurate economists in the world on forecasting the US economy overall (placed third, last published by the “Bloomberg Rankings of Top Forecasters”).  During the Global Financial Crisis, he was also acknowledged as the second-best US forecaster worldwide.  

Moreover, he was exclusively identified by Bloomberg to have accurately predicted the onset of the 2009 US recovery 16 months ahead of the official announcement.  Consequently, he has been widely publicized as one of “Wall Street’s Most Prophetic Economists”.