United States: Long and variable lags evident in credit availability

Summary

United States: Long and variable lags evident in credit availability

• Ben Franklin famously said, “If you would know the value of money, try to borrow some.” Amid a light calendar for economic data, we focus this week on how lenders tightened standards for most loan types in Q3 even as demand for loans weakened, according to the Federal Reserve's Senior Loan Officer Opinion Survey (SLOOS).

• Next week: CPI (Tue.), Retail Sales (Wed.), Housing Starts (Fri.)

International: British economy stalls during the third quarter

• The U.K. economy stalled during the third quarter, as Q3 GDP registered a flat quarter-over-quarter outcome. While that was better than the consensus forecast for a small decline, the details of the report were less encouraging. Consumer spending, government spending and business investment all fell during the quarter, indicative of very weak domestic demand. We still expect the U.K. to fall into a mild recession through late 2023 and into early 2024.

• Next week: Japan GDP (Wed.), China Industrial Production & Retail Sales (Wed.), U.K. CPI (Wed.)

Interest rate watch: Reserve Bank of Australia resumes rate hikes

• While the Federal Reserve and many of the world's other major central banks are currently on hold, a few central banks are continuing to nudge interest rates higher. One such institution is the Reserve Bank of Australia (RBA), which, after remaining on pause since July, resumed its monetary tightening cycle this week with a 25 bps policy rate increase to 4.35%.

Topic of the week: Census projects population dip in 2080

• This week, the U.S. Census Bureau released its first population projections incorporating the results of the 2020 Census. The projections, stretching into 2100, show population growth plateauing over the next few decades. The population is expected to peak at 370 million in 2080 before contracting in the following years.

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