Retail Sales (May)

The 1.3% decline in retail sales in May is arguably a lot better than it looks because there were big upward revisions to the April data and spending on food and drink services posted another solid increase last month, with the latter suggesting that the recovery in services consumption is on a solid footing. While real consumption still looks likely to have fallen in May, the offsetting positive news means we are sticking to our forecast that consumption will rise by 10% annualised in the second quarter.
Michael Pearce Senior US Economist
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US Economics Weekly

Powell signals turning point in policy

Fed Chair Jerome Powell’s congressional testimony this week was markedly more hawkish. We wouldn’t characterise it as a full-blown Volcker moment. But there could be parallels with former Chair Alan Greenspan’s notorious February 1994 Humphrey-Hawkins testimony.

3 December 2021

US Data Response

Employment Report (Nov.)

The disappointing 210,000 gain in non-farm payrolls in November suggests the labour market recovery was faltering even before the potential impact of the new Omicron variant, possibly due to the rising infection rates in the Northeast and Midwest. Nevertheless, the Fed is still likely to push ahead with plans to accelerate the pace of its QE taper at this month’s FOMC meeting.

3 December 2021

US Data Response

ISM Manufacturing Index (Nov.)

The November ISM manufacturing survey suggests that supply shortages are yet to ease significantly, but it does at least echo anecdotal reports that they are no longer getting worse.

1 December 2021

More from Michael Pearce

US Data Response

ISM Manufacturing Index (Jun.)

The headline ISM manufacturing index was virtually unchanged at a high level in June, but the far bigger story is the further rise in the prices paid index to 92.1 from 88.0, its highest level since the 1970s. That is consistent on past form with CPI inflation rising above 5% in the coming months.

1 July 2021

US Data Response

Durable Goods (May)

The 2.3% m/m rise in durable goods orders last month was driven by another big increase in commercial aircraft orders reflecting the recovery in air travel, with underlying orders weaker than expected. The latter is not too concerning, however, given how far orders are above their pre-pandemic trend, while the continued strength of shipments suggests that business equipment investment is on track for another strong gain in the second quarter.

24 June 2021

US Economics Update

Surveys point to surge in wage and price inflation

The surge in job openings and voluntary quits in April add to the survey and anecdotal evidence that labour shortages are becoming increasingly acute.  Those shortages look set to persist for some time and point to both wage growth and price inflation rising markedly in the months ahead.

8 June 2021
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