The Cut in US Interest Rates
Tutor2u Economics
29 October 2008
United States Official Interest Rates
Percent
Fed Funds Interest Rate (per cent)
7
7
6
6
5
5
4
4
3
3
2
2
1
1
0
0
00
01
02
03
04
05
06
07
08
Source: Reuters EcoWin
American Idle
Payroll Employment Totals, monthly, seasonally adjusted
17.5
17.5
Manufacturing
16.5
16.0
16.0
15.5
15.5
15.0
15.0
14.5
Retail trade
14.5
14.0
13.5
13.5
13.0
13.0
7.8
7.7
7.6
7.5
7.4
7.3
7.2
7.1
7.0
6.9
6.8
6.7
6.6
7.8
7.7
7.6
7.5
7.4
7.3
7.2
7.1
7.0
6.9
6.8
6.7
6.6
Construction
01
02
03
04
05
06
07
millions
14.0
00
millions
17.0
16.5
Person (millions)
Person (millions)
17.0
08
Source: Reuters EcoWin
Sales of Motor Vehicles in the United States
Number of
Thousands per month, seasonally adjusted
700000
700000
600000
600000
500000
500000
400000
Domestic passenger car sales
400000
300000
200000
300000
Imported passenger car sales
200000
100000
100000
0
0
00
01
02
Car Sales, Domestic passenger
03
04
05
06
07
08
Car Sales, Imported passenger
Source: Reuters EcoWin
USA Consumer Confidence By Age
Index
Conference Board confidence index, seasonally adjusted
150
150
140
140
130
130
120
120
110
110
100
100
90
90
80
80
70
70
60
60
50
50
40
40
30
30
00
01
02
03
Consumer confidence, 35-54
Consumer confidence, 55 and over
04
05
06
07
08
Consumer confidence, under 35
Source: Reuters EcoWin
United States - GDP and Interest Rates
Percent
Percentage rate of growth year on year at constant prices
5.0
5.0
4.0
4.0
3.0
Economic Growth
3.0
2.0
2.0
1.0
1.0
0.0
0.0
7
7
Percent
US Base Rates
6
6
5
5
4
4
3
3
2
2
1
1
0
0
98
99
00
01
02
03
04
05
06
07
08
Source: OECD
Household debt service costs
Percent
Interest payments on debt as a percentage of disposable income
14.5 United States, Ratio, household debt service DSR, SA 13.85
14.5
14.0
14.0
13.5
13.5
13.0
13.0
12.5
12.5
12.0
12.0
11.5
11.5
11.0
11.0
10.5
10.5
80
82
84
86
88
90
92
94
96
98
00
02
04
06
08
Source: Reuters EcoWin
Inflation and Nominal Interest Rates in the USA
Per cent
7
7
Percent
Interest rates
6
6
5
5
4
4
Inflation
3
3
2
2
1
1
0
0
00
01
02
03
04
05
06
07
08
Source: Reuters EcoWin
New Home Sales in the USA - Signs of Recession
Number of
For sale at end of period, total, seasonally adjusted
600000
600000
550000
550000
500000
500000
450000
450000
400000
400000
350000
350000
300000
300000
250000
250000
00
01
02
03
04
05
06
07
08
Source: Reuters EcoWin
Non-farm Employment in the United States
140.0
140.0
137.5
137.5
135.0
135.0
132.5
132.5
130.0
130.0
127.5
127.5
125.0
125.0
122.5
122.5
120.0
120.0
117.5
117.5
115.0
115.0
95
96
97
98
99
00
01
02
03
04
05
06
07
millions
Person (millions)
Seasonally adjusted employment data, millions
08
Source: Reuters EcoWin
USA Housing Starts
2.50
2.50
2.25
2.25
2.00
2.00
1.75
1.75
1.50
1.50
1.25
1.25
1.00
1.00
0.75
0.75
millions
Number of (millions)
Monthly total, seasonally adjusted, milions
00
01
02
03
04
05
06
07
08
Source: Reuters EcoWin