Economist insights: The United States and China exchange tariff threats, moderation in US consumption growth and a drop in Swiss imports in February (p.1)
› The United States threatened China with an increase in trade tariffs on 1,300 products, but the Chinese quickly retaliated. It’s a power struggle with limited macroeconomic impact at this stage
› Job growth in the US was disappointing in March, as was consumption growth in February, in line with our forecasts of a moderate acceleration in GDP in 2018
› In Switzerland, the trade surplus jumped thanks to a fall in imports in the chemicals/pharma and automobile sectors. Even corrected for this temporary factor, trade remains well oriented
Focus US: Residential construction could provide greater support to GDP growth in 2018-2019 (p.5)
› Residential investment represented just 3.5% of GDP in 2017, much lower than its long-term average of 4.6%, leaving greater room for a catch-up by the sector
› While real estate supply is currently low in the US, demand is likely to continue to grow and could thus stimulate residential construction in 2018-2019
› Despite the Fed’s monetary normalisation process, the increase in 30-year mortgage rates should remain limited and housing affordability should remain favourable according to our analysis
Weekly Economic Insights - April 9th 2018 - US tariffs and consumption Swiss imports and US residential investment
