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Office-based jobs contractions focused in Midwest and West Coast Total employment growth in November across our 30 metros was weak compared with the rest of 2023, growing by 0.3% 3m/3m once seasonally-adjusted. On average, office-based jobs contracted for …
4th January 2024
This page has been updated with additional analysis since first publication. Lower mortgage rates will ease the squeeze, but still some pain to come November’s money and credit data suggest that the recent falls in mortgage rates will stimulate new …
Strong November lending, but subdued investment volumes Net lending to commercial property increased for the ninth consecutive month in November, but that wasn’t reflected in investment volumes which dropped further. But throughout H1 2024 we expect …
Rise in mortgage approvals set to continue The rise in mortgage approvals in November was little surprise given the sharp drop back in mortgage rates since July. Given recent further falls in swap rates, mortgage rates are likely to continue to fall from …
Minutes more nuanced than expected, given post-FOMC hawkish chatter The minutes of the mid-December FOMC meeting were slightly more dovish that we were expecting – more in line with the message delivered by Fed Chair Jerome Powell in his press conference …
3rd January 2024
This page has been updated with additional analysis since first publication. Modest rebound to end a dismal year Despite the modest rise in the ISM manufacturing index to 47.4 in December, from 46.7, the survey indicates that conditions in the factory …
Mortgage rates below 7% spur further recovery in mortgage demand Mortgage rates dropping below 7% were the catalyst for a marked uptick in mortgage applications for home purchase in December. The 7.1% m/m rise in mortgage applications for home purchase …
Flat prices in December confirm 2023 resilience Unchanged house prices in December ensured that over the course of 2023 they fell by much less than forecasters had expected. With mortgage rates falling, it is increasingly likely that house prices avoid …
29th December 2023
This page has been updated with additional analysis since first publication. GDP will rebound this quarter While the November activity data were a mixed bag, they strongly suggest that the economy dodged a recession. Taking industrial production first, …
28th December 2023
This page has been updated with additional analysis since first publication Labour market should tread water from next year The unemployment rate stayed unchanged in November, following consecutive falls in the previous two months. We think it should …
26th December 2023
This page has been updated with additional analysis since first publication. Rate cuts approaching The weaker-than-expected monthly GDP figures raise the risk that the economy contracted again this quarter and are another reason to think that the Bank of …
22nd December 2023
This page has been updated with additional analysis since first publication. Post-pandemic inflation is over; Fed rate cuts coming soon The confirmation that core PCE prices rose by just 0.06% m/m in November means that, over the past six months, core …
This page has been updated with additional analysis since first publication. Dose of festive cheer for retailers, but unlikely to last into new year The 1.3% m/m rebound in retail sales volumes in November may have paused the recent retail woes as Black …
This page has been updated with additional analysis since first publication. Mildest of mild recessions may have begun in Q3 The final Q3 2023 GDP data release shows that the mildest of mild recessions may have started in Q3. But whether or not there is a …
This page has been updated with additional analysis since first publication. Inflation will only return to 2% by end-2024 The plunge in inflation in November was broad-based, but with the large drag from energy prices turning into a boost as energy …
21st December 2023
Consumption growth better than feared The strong rise in retail sales volumes in October suggests that consumption growth will accelerate this quarter. That presents an upside risk to our forecast that GDP will edge down again, although we remain …
This page has been updated with additional analysis since first publication. Still scope for pre-election splash in Spring Budget We doubt November’s public finances figures will prevent the Chancellor from unveiling a further pre-election fiscal splash …
Trough in existing home sales behind us: Existing home sales recovered somewhat in November from the 13-year low reached in October, as falling mortgage rates brought more buyers and sellers into the market. That chimes with the pickup in mortgage …
20th December 2023
This page has been updated with additional analysis since first publication. Collapsing domestic inflationary pressures may mean BoE cuts rates earlier For the second month in a row, the falls in CPI inflation from 4.6% in October to 3.9% in November …
This page has been updated with additional analysis since first publication. Net trade will make a positive contribution to Q4 growth Even though the trade deficit narrowed in November, goods trade will probably be a drag on GDP growth this quarter. …
Single-family starts jump to 19-month high The extreme lack of existing inventory on the market continued to support newbuild demand and construction activity in November, as single-family starts jumped to an 19-month high. The rise is at odds with the …
19th December 2023
This page has been updated with additional analysis since first publication. A temporary step backward The renewed acceleration in core inflation pressures in November was largely due to a jump in travel tour prices, which is likely to be quickly …
The Bank of Japan left policy settings unchanged today as widely anticipated. And while Governor Ueda is sounding more confident that 2% inflation will be sustained, we now expect the Bank of Japan to end negative interest rates in March rather than in …
Bank of Japan will end negative rates next month The Bank of Japan left policy settings unchanged today as widely anticipated but we still expect policymakers to end negative rates in January and to phase out Yield Curve Control later in 2024. The Bank’s …
RBA will soon turn dovish The minutes of the RBA’s December meeting reinforce our view that the Bank will be shifting to rate cuts before long. As it has done at virtually every meeting this year, the Board discussed the option of a 25bp rate hike …
November’s slight resurgence in lending likely temporary Net lending on commercial real estate by banks resurged in November, despite signs from other data that lenders would continue to pull back from real estate lending. That said, the $4.4bn of net …
18th December 2023
Manufacturing boosted by end of UAW strike The 0.3% m/m rebound in manufacturing output in November was, in reality, a disappointment, since it included a 7.1% m/m rebound in motor vehicle output, after the UAW union ended its strike at the Big Three …
15th December 2023
This page has been updated with additional analysis since first publication. Resilient activity to encourage BoE to double down on high for longer The rise in the flash composite activity PMI, from 50.7 in November to 51.7 in December, increased the …
This page has been updated with additional analysis since first publication. Recession unlikely The composite PMI rebounded in December, which means we think there will unlikely be an incoming recession. The manufacturing PMI edged down further but the …
A third consecutive decline in sales volumes The slump in manufacturing sales volumes in October suggests that there are downside risks to the flash estimate that GDP rose by 0.2% m/m at the start of the fourth quarter. The 2.8% m/m decline in …
14th December 2023
This page has been updated with additional analysis since first publication. Solid consumption growth supports soft landing The rebound in retail sales in November provides further illustration that the continued rapid decline in inflation is not coming …
Few signs Bank of England is starting to contemplate rate cuts The Bank of England sprung no surprises, leaving interest rates at 5.25% for the third time in a row and pushing back against the prospect of near-term interest rate cuts. While the recent …
This page has been updated with additional analysis since first publication Labour market will continue to loosen Even though employment growth remains strong, job creation isn’t fast enough to absorb the surge in the labour force. Accordingly, we expect …
This page has been updated with additional analysis since first publication. Domestic demand to remain weak The rise in “core” machinery orders in October is a sign that business investment may rebound in Q4 after falls in q/q terms in both Q2 and Q3. In …
This page has been updated with additional analysis since first publication A double-dip recession is back in play Output slumped anew in Q3, and we suspect it remained in contractionary territory this quarter as well. Accordingly, we think the RBNZ will …
13th December 2023
Stubborn Fed demonstrates the SEP’s shortcomings The Fed’s reluctance to acknowledge that it will need to begin cutting its policy rate soon – to prevent a run-up in real rates – was predictable enough based on its intransigence ahead of previous turning …
Contraction in October sets scene for stagnation in 2024 Note: We’ll be discussing the Fed, ECB and Bank of England December decisions and the policy outlook for 2024 in an online briefing on Thursday, 14 th December . Click here to register for the …
This page has been updated with additional analysis since first publication. Strong Tankan suggests Japan won’t slip into recession The continued improvement in the Tankan suggests that the drop in Q3 GDP was just a blip, but we still expect GDP growth …
This page has been updated with additional analysis since first publication. Stronger rise in core prices buys Fed a little more time The slightly stronger 0.28% m/m rise in core consumer prices in November suggests the Fed may be able to hang onto its …
12th December 2023
This page has been updated with additional analysis since first publication. Sharp fall in wage growth will further fuel market rate cut expectations The sharp fall in wage growth in October will probably further fuel investors’ expectations that interest …
Inflation concerns easing The plunge in the University of Michigan’s consumer inflation expectations measures in December will give reassurance to the Fed ahead of its meeting next week that there are few signs of inflationary pressures reigniting. …
8th December 2023
Payrolls boosted by returning strikers The 199,000 increase in November payroll employment included 47,000 workers returning from strikes (30,000 UAW members and 17,000 SAG Aftra members). Stripping out that one-off boost, the 152,000 gain was roughly the …
This page has been updated with additional analysis since first publication. Wage growth will stay strong Regular wage growth accelerated in October and we expect it to stay strong in the coming months as the virtuous cycle between prices and wages …
7th December 2023
Halifax confirms that prices are on the rise again The second consecutive monthly rise in the Halifax house price index in November mirrored the increase in the Nationwide index, confirming that house prices have not only stabilised, but are rising. …
Net trade could remain a drag on growth in Q4 Notwithstanding the slight expansion in the goods trade surplus in October, net trade could subtract from growth this quarter. The rise in the goods trade surplus from a downwards-revised $6.2bn in September …
Bank maintains tightening bias, but next move likely to be a cut The policy statement from the Bank of Canada was a bit more hawkish than we expected, with the Bank reiterating that it is still concerned about the outlook for inflation and “remains …
6th December 2023
Imports and exports set for further growth in Q4 Despite the widening in the trade deficit in October, net trade looks set to be only a modest drag on fourth-quarter GDP growth. But the survey evidence suggests renewed weakness in exports may still lie …
Slump in imports only partly due to UAW strike The slump in import volumes in October was partly due to the knock-on effects of the UAW strike in the US, but it also suggests that firms are now drawing down their inventories as demand weakens. That raises …
Falling rates allow mortgage demand to recover Falling mortgage rates sparked a modest uptick in mortgage applications for home purchase in November. Recent falls in Treasury yields mean further falls in mortgage rates are imminent, so the trough in …
GDP growth will continue to disappoint GDP growth was softer than most expected in Q3 and with that weakness set to continue, we think that the RBA is done tightening policy. The 0.2% q/q rise in output fell short of the analyst consensus of 0.4% as well …
