For all those who believe the American economy is back into expansion mode the National Bureau of Economic Research has a sobering message.

The NBER has seven academic economists who together comprise the ‘Business Cycle Dating Committee’. Since 1929 its job has been to identify economic peaks and troughs.

At its latest meeting the committee opined that ‘although most indicators have turned up… the determination of the trough date on the basis of current data would be premature.’

That is not to say there is no sign of growth; several of last week’s figures were positive.

US building permits and housing starts both went up in March, as the NAHB housing market index, a measure of business optimism among builders.

The Federal Reserve Banks in New York and Philadelphia both reported improvements in manufacturing activity in April and the Treasury saw inward investment more than double in February. Retail sales were up by 1.6% in the month of March, triple the increase seen in February. It was the third monthly increase in sales and the 7.6% annual gain was the biggest in more than four years.

Although the committee is not yet ready to commit itself, many economists believe the longest downturn since the Great Depression ended in the middle of last year.

They believe the US economy is on the mend, even if it will take a considerable while to return to pre-crisis levels of growth.

Sterling is back into the same 3% range that constrained it in March. With the election less than three weeks away there is little chance of any serious upward push.

Buyers of the dollar should hedge at least 50% of what they will need. If the money is required in the near future they should consider covering the whole amount.

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