Edmond de Rothschild – Weekly Economic Insights – April 9th 2018 – US tariffs and consumption, Swiss imports and US residential investment

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Economists' insight: The Fed steals Donald Trump’s thunder

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

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