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Muted ISM services consistent with GDP stagnation; job openings drop back The modest rebound in the ISM services index to 52.7 in November, from 51.8, left our weighted composite index at a level consistent with an outright stagnation in GDP. Admittedly, …
5th December 2023
RBA is done hiking rates Although the RBA won’t tighten policy any further, there is a good chance that the Bank will hold the cash rate at its current peak for longer than we anticipate. The RBA’s decision to leave rates unchanged at its meeting today …
This page has been updated with additional analysis since first publication. Inflation won’t reach BoJ’s target until end-2024 While inflation excluding fresh food in Tokyo wasn’t far above the Bank of Japan’s 2% target in November, we think it will take …
4th December 2023
This page had been updated with additional analysis since the first publication. Manufacturing activity continues to struggle The unchanged reading of 46.7 for the ISM manufacturing index in November suggests that manufacturing activity continued to …
1st December 2023
Labour market conditions loosening The labour market is weaker than the 24,900 rise in employment might suggest, with the unemployment rate rising again and hours worked slumping by 0.7% m/m last month. The fall in hours worked means that the preliminary …
Rising prices continue to confound forecasters The further small increase in the Nationwide house price index in November was unexpected and came on the heels of an even larger rise in October. It means house prices are on track to fall by just 2% y/y in …
This page has been updated with additional analysis since first publication. Labour market not out of the woods yet The renewed tightening of the labour market in October probably reflects the lagged effects from the surge in output across the first half …
30th November 2023
This page has been updated with additional analysis since first publication. A bumpy landing so far, but recession risks remain On the face of it, the upward revision to second-quarter GDP growth combined with the preliminary estimate of a strong monthly …
Falling PCE inflation suggests rate cut speculation likely to grow The muted rise in real consumption and further decline in core PCE inflation in October will reinforce the growing belief in markets that interest rate cuts are on the horizon. Real …
Office-based jobs contracted for the first time in over three years Total employment grew by 0.3% 3m/3m once seasonally-adjusted in October across our 30 metros, which is weak both by this year’s standards and of the previous decade. Meanwhile, …
This page has been updated with additional analysis since first publication. Slowdown in private capex has further to run Private investment growth softened in Q3 and firms’ forecasts for 2023/24 suggest that this slowdown has further to run. The 0.6% …
This page has been updated with additional analysis since first publication. Weakness in consumption raises risk of recession While industrial production kept rising in October, firms’ output forecasts for the coming months are weak and the slump in …
This page has been updated with additional analysis since first publication. Higher interest rates will continue to percolate through the economy October’s money and credit data suggest that higher interest rates are continuing to percolate through the …
29th November 2023
Trough in mortgage approvals behind us With mortgage rates easing, the rise in mortgage approvals in October confirms that the trough in mortgage approvals is behind us. But with mortgage rates unlikely to fall much below 5% until the second half of 2024, …
This page has been updated with additional analysis since first publication. RBNZ will cut rates in the second half of next year While the RBNZ signaled that it could hike rates further, we still think that the tightening cycle is now over and that the …
This page has been updated with additional analysis since first publication. Trimmed mean inflation set to fall in earnest before long With trimmed mean inflation only moderating slowly, the RBA may well decide to hike interest rates further next year, …
House prices continue to defy gravity Another large monthly gain in house prices in September suggests that the extremely limited supply of existing homes for sale continued to outstrip the drag on demand from high mortgage rates. This was a stronger …
28th November 2023
Black Friday may result in further rise in sales volumes in Q4 While retail sales values fell in October, a renewed boost from Black Friday in November may yet result in a second consecutive rise in sales volumes across Q4. The 0.2% m/m fall in sales …
Temporary pause in strength of new home sales New home sales reversed most of their rise in the previous month as mortgage rates spiked to 8%. However, we don’t think this marks an end to the strength in new homes sales. That’s because the supply of …
27th November 2023
Retail sales perk up after weak Q3 The renewed rise in retail sales volumes in September was not enough to prevent a large contraction in sales volumes over the third quarter. The balance of risks is probably now skewed to the downside surrounding our …
24th November 2023
This page has been updated with additional analysis since first publication Decreases all across the board suggests another weak quarter The further slowdown in the composite PMI in November suggests that GDP growth remained sluggish this quarter. The …
This page has been updated with additional analysis since first publication. Inflation will only reach 2% by the end of next year The jump in headline inflation in October isn’t as bad as it looks as underlying inflation kept falling. Nonetheless, it …
23rd November 2023
This page has been updated with additional analysis since first publication. Something for everyone, but bigger point is labour supply is too low The net migration figures for the year to June 2023 give some ammunition to both sides of the political …
This page has been updated with additional analysis since first publication. Sticky price pressures will add to the Bank of England’s unease The rise in the flash composite activity PMI, from 48.7 in October to 50.1 in November, is still consistent with a …
For more detailed analysis of the Autumn Statement, see our UK Economics Focus here . Chancellor chips away at fiscal tightening ahead of an election The net new giveaway the Chancellor announced today of £14.3bn in 2024/25 (0.5% of GDP) is a bit bigger …
22nd November 2023
Equipment investment continues to struggle Aside from the plunge in the volatile transport component, the October durable goods orders data suggest that business equipment investment continues to struggle in the fourth quarter. The 5.4% m/m plunge in …
Fed offers something for everyone There is something for everyone in the minutes of the Fed’s early November policy meeting. The FOMC still just about maintained a tightening bias, but the overwhelming impression is that officials thought rates had …
21st November 2023
Spike in rates takes sales to fresh 13-year low Existing home sales fell sharply to a fresh 13-year low in October as the 8% peak in mortgage rates in the same month caused buyers and sellers to withdraw from the market. Mortgage applications for home …
This page has been updated with additional analysis since first publication. Core inflation pressures muted There was good news all round in the October CPI report, with the overall CPI falling in month-on-month seasonally adjusted terms for the first …
Note: We’ll be discussing the UK macro and market consequences of the Chancellor’s Autumn statement at 10:00 EST/15:00 GMT on 22nd November. Register here for this 20-minute online briefing. This page has been updated with additional analysis since first …
Starts continue to bounce back With homebuilders encouraged by the recent surge in buyers entering the new homes market due to a lack of existing inventory, housing starts and permits edged slightly higher in October. Total housing starts rose 1.9% m/m …
17th November 2023
This page has been updated with additional analysis since first publication. Retail woes continued at the start of Q4, and further weakness to come The 0.3% m/m fall in retail sales volumes in October means that after contracting by 1.0% q/q (which was …
Output temporarily depressed by UAW strike The 0.7% m/m decline in manufacturing output in October was entirely due to the now-resolved UAW strike, which translated into a temporary 10.0% m/m fall in motor vehicle output. With the UAW securing lucrative …
16th November 2023
This page has been updated with additional analysis since first publication. The rise in unemployment has further to run Although jobs growth gained momentum in October, a renewed uptick in the unemployment rate should ensure that the RBA doesn’t feel the …
Manufacturing and wholesale trade GDP broadly unchanged in September The slightly better-than-expected gains in manufacturing and wholesale sales in September do not change the big picture that GDP in each sector was probably largely unchanged, supporting …
15th November 2023
Despite the indefatigable consumer, price pressures fading fast Retail sales values fell by 0.1% m/m in October, but the decline was principally due to a price-related drop back in gasoline station sales and a modest 1.0% m/m decline in motor vehicle …
This page has been updated with additional analysis since first publication. Slower progress ahead after big plunge The fall in CPI inflation from 6.7% in September to 4.6% in October was a bit bigger than expected (consensus and BoE forecasts 4.8%, CE …
This page has been updated with additional analysis since first publication . Wage growth has likely peaked Notwithstanding the acceleration in wage growth last quarter, we doubt that the Reserve Bank of Australia will tighten policy any further. The 1.3% …
GDP (Q3 2023, Preliminary) Tepid Q3 GDP outturn sets the tone for 2024 GDP growth weakened sharply in the third quarter and we expect it to remain soft next year. The 0.5% q/q contraction in Q3 GDP (-2.1% annualised) was much weaker than the analyst …
This page has been updated with additional analysis since first publication. Downward pressure on core inflation resumes The softer 0.2% m/m rise in core consumer prices in October makes it even less likely that the Fed will raise rates any further, and …
14th November 2023
This page has been updated with additional analysis since first publication. Wage growth continues to ease, but only slowly With wage growth continuing to ease and signs that a further loosening in the labour market lies ahead, higher interest rates …
Second month of declining loan balances and plenty more to come The second consecutive monthly decline in outstanding commercial real estate loan balances held by US banks in October means the data are starting to reflect the pullback in real estate …
13th November 2023
Renewed inflation concerns The continued rise in consumers’ inflation expectations in November showed that October’s jump was not a one-off and will be of some concern to the Fed. However, the headwind from persistently weak confidence is likely to weigh …
10th November 2023
This page has been updated with additional analysis since first publication. Recession or not, economy not weak enough to quash price pressures The Q3 GDP data will spark a big debate about whether or not a recession has just begun (the published growth …
Mortgage applications bottom out After their weakest month in 28 years, there were signs that mortgage applications for home purchase bottomed out at the end of October. Mortgage applications for home purchase dropped 9.1% m/m across October as a whole, …
8th November 2023
Surplus boosted by temporary surge in oil prices The September trade data look encouraging at first glance, with the merchandise trade surplus widening to $2.0bn, from $1.0bn, but the 2.7% m/m increase in export values was mostly due to higher oil prices. …
7th November 2023
Support from rebounding exports unlikely to last The modest increase in the trade deficit to $61.5bn in September, from $58.7bn, reflected strong gains in imports and exports, capping off solid quarterly rebounds in both. But with the global economy …
RBA’s next move will be down With today’s widely anticipated rate rise now behind us, we believe the RBA’s tightening cycle is at an end. The RBA’s decision to lift its cash rate by 25bp at today’s meeting came as a surprise to few. Indeed, 35 out of 39 …
This page has been updated with additional analysis since first publication. Wage growth will continue to accelerate Regular wage growth accelerated in September and we think it will continue to climb to around 2% next year. According to the preliminary …
Slowdown spreads to services sector The ISM services index fell to a five-month low of 51.8 in October, from 53.6, adding to the evidence that economic growth is slowing after a blockbuster third quarter. Unlike the renewed slump in the manufacturing …
3rd November 2023
