Investment Clock insights

US economy gets some mojo


Ian Kernohan

10 January 2017

One of our favourite domestic indicators for the US economy, the National Federation of Independent Business (NFIB) small business survey, has just seen its steepest increase since 1980.  Small companies tend to be the main swing factor in US cycles, so the NFIB survey complements the better known Institute for Supply Management (ISM), which is more international in outlook.  It appears that the presidential election has been an important catalyst for business sentiment, ahead of promised corporation tax cuts and deregulation.
 
This news fits neatly with the general run of stronger data from the US over the past couple of months and plays into two of our main investment themes – that global GDP momentum is rising, and that the US Federal Reserve will be hiking while other main central banks are on hold.

One of our favourite domestic indicators for the US economy, the National Federation of Independent Business (NFIB) small business survey, has just seen its steepest increase since 1980. Small companies tend to be the main swing factor in US cycles, so the NFIB survey complements the better known Institute for Supply Management (ISM), which is more international in outlook. It appears that the presidential election has been an important catalyst for business sentiment, ahead of promised corporation tax cuts and deregulation. 

 

This news fits neatly with the general run of stronger data from the US over the past couple of months and plays into two of our main investment themes – that global GDP momentum is rising, and that the US Federal Reserve will be hiking while other main central banks are on hold.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.