USA in focus: Elections, debt ceiling, employment and treasury yields
This week's chart pack covers the following topics:
Biden's odds plummet as Trump takes lead in presidential race
Macrobond users can click here to access the chart and gain deeper insights into the data.
What the chart shows:
This chart from PredictIt illustrates the fluctuating odds of various candidates winning the 2024 presidential election, based on betting market data. As of July 5, 2024, Donald Trump leads at 58 cents per share with approximately a 58% chance, while Joe Biden's odds have dropped to 23%.
Behind the data:
This significant shift in Biden's odds coincided with the first presidential debate on June 27 in Atlanta, Georgia. The debate performance sparked concerns among both Democrats and Republicans about Biden's fitness for a second term, particularly due to his age (he would be 86 by the end of his potential second term.) This has led to increased speculation about alternative Democratic candidates, with California Governor Gavin Newsom and Vice President Kamala Harris seeing their odds rise to 22% and 6%, respectively. The coming weeks will reveal whether Biden's debate performance has a lasting impact on his re-election prospects.?
US job market faces pressure as downward revisions signal potential slowdown?
Macrobond users can click here to access the chart and gain deeper insights into the data.
What the chart shows:
This chart shows the revisions to US nonfarm payrolls (NFP) from 2021 to the present, highlighting the differences between initial release estimates and the latest adjustments. The green areas indicate periods where revised data showed higher job additions than initially reported, while the red areas show periods where job additions were revised downward. The dotted line represents the non-recessionary average of 157,000 new hires per month.
Behind the data:
Despite monetary policy restrictions, the US job market has shown resilience, reflected in the better-than-expected NFPs in several months over the past quarters and years. NFPs have also consistently exceeded the non-recessionary average since early 2021. However, since 2023, there has been a downward revision trend (red areas) with only occasional upgrades (green areas), a contrast to the more frequent positive adjustments seen in 2022. The upcoming release for June (scheduled for 5 July) will be closely watched, with expectations of a slowdown to approximately 180,000–190,000 job additions.
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Elevated US debt burden poses risks to future economic stability
Macrobond users can click here to access the chart and gain deeper insights into the data.
What the chart shows:
This chart displays the US debt ceiling and the current debt levels from 1995 to the present. The blue line represents the total public debt subject to the limit, while the red and green areas show the periods when the debt was above and below the statutory limit, respectively. The grey bars indicate US recession periods.
Behind the data:
The US debt ceiling, a limit set by Congress on the amount of federal debt, has been a critical issue. The debt limit of $31.4 trillion has been suspended from June 2023 to January 2025, when Congress must raise it or risk a default on its debt, following the November 2024 presidential election. The suspension aims to prevent a catastrophic default that could freeze financial markets, potentially wiping out trillions of dollars in household wealth and negatively impacting economic activity and employment conditions. Recently, the IMF warned of the adverse consequences of high debt levels, such as higher fiscal financing costs and rollover risks.?
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