Economists see trouble ahead for the US

Short-term outlook for the States is favourable but long-term inflationary pressures and high levels of personal debt point to future restrictive rate rises

UK economists remain concerned about the outlook for the US, despite signs its labour market is strengthening and inflation and retail fears are subsiding. Sebastian Mackay, senior economist at Swip, describes the short-term outlook for the US as reasonably favourable after a soft patch over the past year. "Although the correction in the housing market is still under way, the direct drag on overall growth from declining residential investment is gradually diminishing. So far, concerns that housing market weakness would prompt households to rapidly increase their savings have not materiali...