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America is going back to work The 431,000 rise in non-farm payrolls is another sign that the real economy has plenty of momentum, though with those gains now being helped by a stronger rebound in the labour force, there are signs that wage growth may have …
1st April 2022
Equipment investment still set for stronger Q1 The February durable goods orders data were weaker than we had expected, even controlling for the slump in commercial aircraft orders, but the details are still consistent with first-quarter business …
24th March 2022
Output jumps, but supply shortages persist The jump in manufacturing output last month in part reflects the easing of widespread absenteeism as covid cases fell back sharply . The 1.2% rebound in manufacturing output in February was in line with the jump …
17th March 2022
February weakness offset by upward revisions to January The muted 0.3% m/m rise in retail sales in February was largely offset by the upward revision to January’s gain which, overall, suggests that real consumption growth remains solid. With the sharp …
16th March 2022
Inflation to peak at more than 8% this month Rising energy prices pushed the CPI inflation rate up to a 40-year high of 7.9% in February and, given the spike in crude oil and gasoline prices since Russia's invasion of Ukraine, it will climb well above 8% …
10th March 2022
Net trade a drag on GDP growth The increase in the trade deficit to a record $89.7bn in January, from $82.0bn, means that net trade is on track to subtract close to 2%-pts from annualised first-quarter GDP growth, which we expect to slow to only 1.5% …
8th March 2022
Strong payrolls keep planned Fed tightening on track The stronger than expected 678,000 gain in non-farm payrolls in February and upward revisions to previous months gains is another sign that the real economy has considerable momentum, with the Omicron …
4th March 2022
Demand strong, supply constraints easing gradually The rise in the ISM manufacturing index to 58.6 in February, from 57.6, is another sign that demand remains strong, with the small rise in supplier delivery times and modest decline in the prices paid …
1st March 2022
Real economy in good health The real economy appears to be in good health, suggesting that the Fed will push on with planned rate hikes starting in March, although the Ukraine conflict makes a 50bp hike less likely. The 1.5% m/m gain in real consumption …
25th February 2022
Further evidence of limited Omicron impact The 1.4% m/m rebound in industrial production in January appears to confirm that the Omicron wave has had surprisingly little impact on the economy. That said, the weakening global backdrop suggests manufacturing …
16th February 2022
Rebound after December seasonal problems The strong 3.8% rebound in retail sales in January is not quite as good as it looks, since it is mainly a recovery from the revised 2.5% drop in December. But with the modest decline in food and drink services …
Core inflation showing few signs of slowing The 0.6% m/m rise in consumer prices in January was slightly stronger than we had expected and illustrates that, even as the earlier upward pressure from rising energy prices and goods shortages fades, …
10th February 2022
Exports and imports set for continued strong growth The solid gains in both exports and imports in December are a signal that global supply chain problems are easing, although the further widening in the trade deficit suggests that net trade will be a …
8th February 2022
Strong payrolls clear Fed for lift-off The 467,000 gain in non-farm payrolls in January is even stronger than it looks, as it came despite the spike in absenteeism driven by the Omicron virus wave and was accompanied by significant upward revisions to the …
4th February 2022
Manufacturing escapes Omicron hit The small fall in the ISM manufacturing index to 57.6 in January, from 58.8, suggests the Omicron virus wave hasn’t had nearly as big an impact on the factory sector as implied by some of the early regional surveys or the …
1st February 2022
Stronger growth not a sign of things to come The acceleration in GDP growth to 6.9% annualised in the fourth quarter, from 2.3% in the third, mainly reflects a record surge in inventories, which will be partly reversed in the first quarter of this year. …
27th January 2022
Omicron absenteeism weighs on output The 0.3% m/m decline in manufacturing output is probably a sign that Omicron-related employee absenteeism was already weighing on output by the end of last year. We expect an even bigger hit in January but, assuming …
14th January 2022
Collapse in control sales partly reflects seasonal adjustment issue The 1.9% plunge in retail sales in December in part reflects what appears to be a problem with seasonal adjustment process around the holidays. The initial Omicron wave appears to have …
Inflation hits 40-year high of 7% CPI inflation hit a 40-year high of 7.0% in December and, although the headline rate has probably peaked now, core CPI inflation increased to 5.5% last month and will continue to climb toward 6% over the coming months. …
12th January 2022
Full employment to drive sustained rapid wage growth While the 199,000 gain in non-farm payrolls once again disappointed the consensus, a much larger gain in the household measure of employment and a tepid rise in participation pushed the unemployment …
7th January 2022
Net trade was a drag on fourth quarter GDP after all The sharp rebound in the trade deficit in November means that net trade is now on track to be a small drag on economic growth in the fourth quarter, rather than a small boost as we had previously …
6th January 2022
Survey too early to capture Omicron disruption The ISM manufacturing index suggests that the pace of industrial activity growth remained reasonably solid at the end of last year, but the survey came too early to capture the potentially significant supply …
4th January 2022
Falling real incomes & virus drag point to consumption slowdown The November durable goods and income & spending data are consistent with our estimate that fourth-quarter GDP growth was 6.5% annualised, but point to a slowdown in early 2022. Strong gains …
23rd December 2021
Output rising as shortages ease The solid 0.7% increase in manufacturing output last month suggests that shortages are gradually easing. With demand still strong, the latest surveys are still consistent with manufacturing output expanding at a near-5% …
16th December 2021
Shortages partly explain weak start to Holiday season With prices rising sharply last month, the muted 0.3% m/m rise in retail sales values suggests that consumption was little changed in real terms. That won’t stop the Fed from accelerating the pace of …
15th December 2021
Inflation hits near 40-year high Consumer prices rose by 0.8% m/m in November, taking the annual CPI inflation rate up to a near 40-year high of 6.8% but, with energy prices falling sharply in recent weeks, last month probably marked the peak. The same is …
10th December 2021
Net trade to provide big boost to Q4 GDP growth The 8.1% m/m surge in exports in October means that net trade is on course to add about 1% point to fourth-quarter GDP growth, which we think will be 6.5% annualised, and provides more evidence that global …
7th December 2021
Employment growth stumbles, but details more positive 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 …
3rd December 2021
Supply shortages still acute, but no longer worsening 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. The slight rebound …
1st December 2021
Fourth quarter GDP growth to be more than 5% annualised The 0.5% fall in durable goods orders was not as bad as it looked, given that it was entirely due to a fall in volatile aircraft orders. But the bigger news this morning was the huge 10.7% m/m surge …
24th November 2021
Supply chain woes unlikely to ease quickly The strong 1.6% m/m rebound in industrial production in October came as the unwinding of earlier hurricane-related disruption and a partial recovery in motor vehicle production boosted manufacturing output. But …
16th November 2021
Spending on goods rebounds, but services subdued The 1.7% m/m rise in retail sales in October, driven by a similarly strong increase in underlying control group sales, suggests that real consumption will rebound to between 3% and 4% annualised in the …
Inflationary pressures building throughout the economy The 0.9% m/m surge in consumer prices in October illustrates that the upward pressure from supply shortages remains intense and that, even when those effects eventually fade, rising cyclical pressures …
10th November 2021
Stronger payroll growth, but no signs of a rebound in labour supply The stronger 531,000 gain in non-farm payrolls in October suggests the economy is rebounding rapidly from the initial Delta wave but, despite easing virus concerns, there was absolutely …
5th November 2021
Supply chain backlogs to keep trade growth subdued The sharp widening in the trade deficit to $80.9bn in September, from $72.8bn, should soon start to reverse as oil exports recover from the disruption caused by Hurricane Ida. But ongoing global supply …
4th November 2021
No end in sight for shortages While the headline ISM manufacturing index fell only slightly to 60.8 in October, from 61.1, the survey details add to the evidence that shortages are constraining activity and pushing up prices. The ISM survey suggests that …
1st November 2021
Growth hit by Delta, fading fiscal boost and shortages GDP growth slowed to only 2.0% annualised in the third quarter, as the Delta wave of infections, the waning fiscal stimulus and shortages, particularly of motor vehicles, triggered a marked slowdown …
28th October 2021
Shortages weighing on investment too The weakness in headline durable goods orders last month was driven by another fall in transport orders, which mostly reflects worsening supply problems in the auto market. The strong increase in underlying orders and …
27th October 2021
Hurricane and shortages hamper production The 1.3% fall in industrial production in September partly reflects a temporary hit to mining and chemicals output from Hurricane Ida and a drop in cooling demand, as the weather returned to seasonal norms. That …
18th October 2021
Shortages likely to keep spending growth subdued The 0.7% m/m rise in retail sales in September suggests goods spending held up a little better than we had anticipated, but real consumption growth still slowed sharply in the third quarter. There were some …
15th October 2021
Cyclical price pressures rapidly building The more muted 0.2% m/m increase in core consumer prices in September is not as encouraging as it looks, since a temporary Delta-related drop back in the prices of high contact services masked a worrying …
13th October 2021
Labour shortages are only getting worse The disappointing 194,000 gain in non-farm payrolls in September probably still counts as “decent” enough for the Fed to begin tapering its asset purchases next month. But alongside signs that activity growth is …
8th October 2021
Supply chain woes will continue to weigh on trade We expect that the widening in the trade deficit to $73.3bn in August, from $70.3bn, will soon start to reverse, as exports catch up with imports. But there is a risk over the coming months that worsening …
5th October 2021
Supply chain disruptions continue to weigh on production The small rise in the ISM manufacturing index to 61.1 in September, from 59.9, mostly reflects an artificial boost from lengthening supplier delivery times rather than any improvement in demand. …
1st October 2021
Business equipment investment still growing rapidly The 1.8% m/m rise in durable goods orders in August was due to the ongoing rebound in commercial aircraft orders together with solid growth in underlying capital goods orders, with the latter reflecting …
27th September 2021
Delta playing havoc with the spending data Even though the 0.7% rise in headline retail sales in August was much better than expected, the details were far less positive, with big downward revisions to previous months, while the rise in online and grocery …
16th September 2021
Ida and Delta likely to cause further slowdown in September The 0.4% m/m rise in industrial production in August lifted it back above its pre-pandemic peak, but was nevertheless weaker than we had expected and suggests that the industrial recovery is …
15th September 2021
Delta puts reopening inflation into reverse The more modest 0.1% m/m increase in core consumer prices in August will be heralded as a sign that the recent surge in inflation was transitory after all but, although the spread of the Delta variant has put …
14th September 2021
Delta variant weighing on economy The well-below consensus 235,000 gain in non-farm payrolls in August suggests that the Delta variant is beginning to weigh on the economy, with leisure & hospitality employment unchanged on the month. Even allowing for …
3rd September 2021
Stronger exports won’t prevent slowdown in GDP growth The narrowing in the trade deficit to $70.1bn in July, from a revised $73.2bn, suggests that the drag on GDP growth from net trade in recent quarters will be partly reversed in the third. The narrowing …
2nd September 2021