Filtered by Subscriptions: US Economics Use setting US Economics
The 3.2% m/m jump in durable goods orders in March mainly reflects a stronger-than-expected gain in the more volatile commercial aircraft component, with the details suggesting that business equipment investment contracted again in the first quarter. …
26th April 2023
Further evidence of fading economic momentum The 0.5% m/m fall in manufacturing output in March provides yet more evidence of a significant loss of economic momentum going into the second quarter. While the return of temperatures to seasonal norms last …
14th April 2023
Sales boosted by online strength Retail sales fell by 1.0% m/m in March, adding to the evidence that the strong start to the year was partly due to the unseasonably mild winter weather. With control group sales only falling by 0.3% m/m last month, …
Small rebound in confidence suggests no big hit from bank turmoil The small rebound in the University of Michigan consumer sentiment index in early April suggests that the easing of the crisis in the banking sector has reassured consumers. Nevertheless, …
Fed uncertain about impact that banking turmoil will have on economy The minutes of the Fed’s mid-March policy meeting are, overall, arguably dovish since in the wake of the collapse of SVB and Signature Bank, “several participants noted that…they …
12th April 2023
Core inflation remains elevated despite easing in shelter There were some encouraging signs in the March CPI report, including the first evidence that housing cost inflation is slowing, but core prices still increased by 0.4% m/m which, on an annualised …
Employment and wage growth continue to trend lower The 236,000 gain in non-farm payrolls in March adds to the evidence that the economy’s strong start to the year was partly a weather-related blip, with momentum now fading again. With the sharp fall in …
7th April 2023
Strong start to the year already going into reverse The ISM services PMI fell to 51.2 in March, from 55.1, adding to the evidence that, following a weather-related sugar high to start the year, the economy and labour market are rapidly losing upward …
5th April 2023
Falling trade volumes adds to signs of economic slowdown The sharp declines in both exports and imports in February add to the signs that economic growth is faltering. Although strong gains in January mean that both are still likely to have risen over the …
Domestic weakness offsetting China reopening boost The slump in the ISM manufacturing index to a new cyclical low of 46.3 in March, from 47.7, indicates that the post zero-Covid recovery in manufacturing activity in China has not benefited US producers …
3rd April 2023
Real spending drops back; core inflation still elevated Although real consumption declined by 0.1% m/m in February, that reversed only a small fraction of the upwardly revised 1.5% surge in January (previously estimated to be 1.1%). Even allowing for …
31st March 2023
Deposits flow from small to big banks The Fed’s H.8 release shows that deposits at small banks declined by $120bn, to $5456bn, in the week ending Wednesday March 15 th . (SVB collapsed on the preceding Friday afternoon.) Borrowings increased by an even …
24th March 2023
Investment weakening even before banking woes The 1.0% m/m fall in durable goods orders in February indicates that business equipment investment was continuing to weaken even before the banking turmoil arose. With business confidence likely to have taken …
Fed opts for dovish hike The 25bp rate hike and new projections unveiled by the Fed today were towards the more dovish end of potential outcomes – with officials acknowledging the likely economic hit from recent banking sector turmoil and leaving their …
22nd March 2023
Confidence declining even before banking turmoil Some of the hit to confidence from turmoil in the banking sector will have been captured in the University of Michigan’s consumer sentiment provisional reading, which fell to 63.4 in March, from 67.0, but …
17th March 2023
Surveys point to renewed weakness soon The February industrial production data were marginally stronger than we had expected, with manufacturing output rising by a further 0.1% following the earlier 1.3% m/m surge in January. But with the surveys going …
Fed’s discount window lending hits record high The Fed’s weekly balance sheet publication (H.4.1) shows the scale of the stresses in the financial system, with outstanding emergency loans standing at $318bn yesterday, up from $15bn a week earlier. To put …
16th March 2023
January surge mostly sustained The 0.4% m/m fall in retail sales in February only partly reversed the 3.2% surge in January, suggesting that real consumption growth will accelerate to at least 3.5% annualised in the first quarter. But there is a risk …
15th March 2023
Strong inflation data unlikely to outweigh financial stability concerns The 0.5% m/m rise in core consumer prices last month adds to the evidence that inflation remains stubbornly high, but the ongoing fallout from the SVB crisis over the coming days is …
14th March 2023
Fed, Treasury and FDIC lay out fire break for banking system In the wake of the collapse of Silicon Valley Bank ($215bn in assets) – which has been followed today by the demise of Signature Bank ($110bn) – the Fed, Treasury and FDIC have acted …
12th March 2023
Employment strong, but rest of report suggests 25/50bp Fed hike debate still unresolved While the above-consensus 311,000 increase in payroll employment last month confirms that the super-sized 504,000 gain in January wasn’t just a seasonal distortion, …
10th March 2023
Strong start to 2023 unlikely to be sustained The widening in the international trade deficit to $68.3bn in January, from $67.2bn, included big rebounds in both imports and exports which, at face value, add to the signs that demand is strengthening at …
8th March 2023
Powell confirms higher peak in rates Fed Chair Jerome Powell appears to have confirmed today that interest rates are set to rise a higher than we previously anticipated. But with most evidence still pointing to economic weakness and lower inflation this …
7th March 2023
Surveys not consistent with economic reacceleration The marginal fall in the ISM services index to 55.1 in February, from 55.2, suggests activity continues to expand at a reasonably healthy pace, but provides further reason to doubt the idea that there …
3rd March 2023
Still firmly in contractionary territory The modest rebound in the ISM manufacturing index to 47.7 in February, from 47.4, leaves it firmly in contractionary territory, and should temper recent talk of a manufacturing resurgence on the back of …
1st March 2023
Resilience of core orders likely to be temporary The 0.7% m/m rebound in core durable goods orders in January rounds off a month of strong activity releases and suggests business investment will hold up a bit better in the first quarter than we had …
27th February 2023
Resurgence in both real spending and inflationary pressure The unexpectedly strong 0.6% m/m increase in core PCE in January, which pushed the annual rate of core inflation up to 4.7%, from 4.6%, is another sign that the Fed might have to leave its policy …
24th February 2023
Fed relatively dovish, but Feb announcement pre-dates run of stronger data The minutes of the Fed’s late-January/early February FOMC policy meeting look relatively dovish, but that is mostly because that meeting pre-dated the run of incredibly strong …
22nd February 2023
Further evidence of January rebound The solid 1.0% m/m rebound in manufacturing output in January provides further evidence that the economy began the year on a strong footing. That said, while the survey evidence also appears to be turning a corner, for …
15th February 2023
Surge in sales erases Q1 recession fears The massive 3.0% m/m surge in retail sales in January may have been partly related to the unseasonably mild winter in the Northeast but, alongside the unexpected strength of payroll employment, it nevertheless …
Core inflation eases only gradually The 0.5% m/m increase in consumer prices in January illustrates that inflation is still declining only gradually, but we still expect that downward trend to accelerate soon, as easing goods shortages feed through and …
14th February 2023
Confidence still near historic lows, despite recent rebound The further modest rise in the University of Michigan consumer sentiment index in early February still only left it in line with its average level during the depths of the financial crisis in …
10th February 2023
Deficit rebounds as easing supply shortages boost imports The December trade data show a rebound in both real exports and imports but, with those gains following steep declines in previous months, the data still suggest that domestic and external demand …
7th February 2023
ISM suggests strong start to the year in services The rebound in the ISM services index to 55.2 in January, from 49.2, reversed almost all of the sharp drop in December and leaves our composite ISM index at a level usually consistent with GDP growth of …
3rd February 2023
Robust payrolls not preventing wage growth slowdown The robust 517,000 gain in non-farm payrolls in January means that, despite most leading indicators of recession flashing red, the economy is clearly not as close to recession as we had suspected. …
Resurgence in productivity and fading ULC growth add to disinflationary pressures Non-farm labour productivity rebounded by 3.0% annualised in the fourth quarter, which means that, despite Fed Jerome Powell’s insistence at yesterday’s press conference, …
2nd February 2023
Fed sticks to its guns, but shifting data suggest hiking cycle almost done As expected following a blitz of speeches by officials ahead of the blackout window, the Fed raised its policy rate by a smaller 25bp, to between 4.50% and 4.75%, but tempered any …
1st February 2023
Another recession signal flashing red The further fall in the ISM manufacturing index to 47.4 in January, from 48.4, suggests that the factory sector has received little benefit from the recent improvements in manufacturing prospects in Europe and China, …
Weak ADP suggests malaise spreading to labour market The muted 106,000 increase in the ADP measure of private payroll employment will add to fears that the malaise in activity has spread to the labour market. Nevertheless, while this supports our estimate …
Easing labour market conditions pushing wage growth lower The 1.0% rise in private wages and salaries in the fourth quarter, down from a 1.2% gain in the third quarter, adds to the evidence that wage growth is slowing gradually. The Fed is still likely to …
31st January 2023
Slump in spending suggests recession could have already started The monthly income and spending figures reveal that, despite the apparent resilience of fourth-quarter GDP growth, the economy was on the precipice of a recession, and may already have fallen …
27th January 2023
Underlying pace of growth already much weaker The 2.9% annualised rise in fourth-quarter GDP was a little stronger than we had expected, but the mix of growth was discouraging, and the monthly data suggest the economy lost momentum as the fourth quarter …
26th January 2023
Manufacturing falls into recession, with output at a 15-month low Echoing the recent slump in the survey-based indicators, industrial production declined by a worse-than-expected 0.7% in December, with November’s decline revised up to 0.6% m/m, from 0.2%. …
18th January 2023
Consumers starting to buckle under higher rates The 1.1% m/m fall in retail sales in December, which follows a downwardly-revised 1.0% fall in November, adds to the evidence from the surveys that the economy was rapidly losing momentum towards the end of …
Sentiment rebounding from historically weak level The further rise in the University of Michigan consumer sentiment index to 64.6 in January, from 59.7, illustrates that consumers have taken some encouragement from the fall in energy prices. Nevertheless, …
13th January 2023
Slump in gasoline prices drives decline in headline CPI Consumer prices declined by 0.1% m/m in December, helped by a 9.4% m/m drop back in gasoline prices and a more modest 0.3% m/m increase in food prices. The pace of monthly gains in food away from …
12th January 2023
Sharp decline illustrates that recession still more likely than soft landing The slump in the ISM services index to a 19-month low of 49.6 in December, from 56.5, is another signal from the surveys that despite the resilience of employment growth, …
6th January 2023
Wage growth slowing despite employment resilience The solid 223,000 gain in non-farm payrolls and drop-back in unemployment to a 50-year low in December will, at face value, do little to ease the Fed’s concerns about resilient core services inflation. …
Trade hit by domestic and external weakness The sharp narrowing of the trade deficit to $61.5bn in November, from $77.8bn, came as a big fall in exports was offset by an even sharper drop in imports. Net trade still looks to have been a small drag on …
5th January 2023
Fed doubling down on hawkish views The minutes of the Fed’s December policy meeting reveal officials in hawkish mood, with participants arguing that “a restrictive policy stance would need to be maintained until the incoming data provided confidence that …
4th January 2023