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Industrial rebound has further to run In contrast to the renewed slump in consumption, the December industrial production figures show manufacturing output continuing to rise strongly and, with inventories still lean, we expect that recovery will continue …
15th January 2021
Fiscal stimulus unable to prevent near-term weakness The further slump in retail sales in December confirms that the continued surge in coronavirus infections is now weighing heavily on the economy and illustrates that, despite the building optimism over …
Inflation to rebound sharply in the spring Inflation remained low at the end of last year, but strong base effects and rebounding energy prices will push it briefly above 3% in the spring and, even once those effects fade in the summer, we expect CPI …
13th January 2021
Slump in payrolls due to new restrictions on services The 140,000 drop in non-farm payrolls was due to a plunge in leisure and hospitality employment, as bars and restaurants across the country were forced to close in response to the surge in coronavirus …
8th January 2021
Import growth remains strong as firms rebuild inventories The widening of the trade deficit in November came as import growth continued to outpace export growth and means net trade will be a significant drag on fourth quarter GDP growth. Those additional …
7th January 2021
Factory sector remains resilient to virus surge The jump in the ISM manufacturing index to a two-and-a-half year high of 60.7 in December, from 57.5, is at odds with the wider evidence that the economic recovery is slowing and suggests the manufacturing …
5th January 2021
Business investment solid, but consumption & job gains heading into reverse The solid gains in durable goods orders and shipments last month underline the continued strength of business equipment investment, but the bigger story for the overall economy is …
23rd December 2020
Sales hit by new lockdowns The latest surge in coronavirus infections, which has forced a number of states to re-impose lockdowns, resulted in a worse-than-expected decline in retail sales in November. With case numbers still trending higher and …
16th December 2020
Production still catching up with consumption The solid 0.8% increase in manufacturing output last month underlines that production is continuing to catch up with the recovery in consumption. Production will continue to rise, even as consumption drops …
15th December 2020
Inflation muted for now, but will climb above 2% next spring Both headline and core consumer prices increased by 0.2% m/m in November, as the rebound in the prices of the goods and services that fell the most in the early stages of the pandemic continued. …
10th December 2020
Payroll gains at risk of stalling in December The slowdown in the pace of non-farm payroll gains to 245,000 in November underlines how the renewed surge in virus cases and restrictions is weighing on services demand, which will only intensify this month . …
4th December 2020
Manufacturing recovery little affected by new virus restrictions The fall in the ISM manufacturing index to a still-solid 57.5 in November, from 59.3, suggests that manufacturing production will continue to catch up with the broader economic recovery …
1st December 2020
Investment rebound continues, but jobless claims rising again October's durable goods data suggest that the economy started the fourth quarter on a strong footing, with business equipment investment continuing to rebound, but the second consecutive weekly …
25th November 2020
Production catching up with consumption The acceleration in manufacturing output in October suggests that, after lagging the broader recovery over the past six months, the factory sector is now making up some lost ground. With inventory levels still lean, …
17th November 2020
New virus wave starting to weigh on spending The weaker than expected 0.3% m/m rise in retail sales in October is still broadly consistent with our forecast that consumption growth will slow to 7.5% annualised in the fourth quarter. But the details …
Price pressures moderating again The unexpected drop back in core inflation to 1.6% last month, from 1.7%, reflects continued subdued demand in the services sector. With the explosion in virus numbers likely to put further downward pressure on demand in …
12th November 2020
Labour market recovery still carrying plenty of momentum The 638,000 rise in non-farm payrolls in October is stronger than it looks as it included a 147,000 drop in temporary Census employment and, alongside the big fall in the unemployment rate, it …
6th November 2020
Employment growth still slowing; exports rebounding Although the markets remain firmly focused on the fallout from the election, the 365,000 rise in the ADP measure of private employment in October indicates that the labour market recovery is starting to …
4th November 2020
Manufacturing recovery to regain some momentum The rise in the ISM manufacturing index to a two-year high of 59.3 in October, from 55.4, suggests that the rebound in production, which has so far lagged spending, should begin to catch up over the coming …
2nd November 2020
GDP rebounds, but remains well below pre-pandemic level The 33.1% annualised rebound in GDP in the third quarter was unprecedented in size, but still left the economy 3.5% smaller than it was in the final quarter of last year. (See Chart 1.) The recovery …
29th October 2020
Business equipment investment recovers, but aircraft still weak The 1.9% m/m rise in durable goods orders in September demonstrates that the economic recovery isn’t entirely dependent on consumers, with business equipment investment recording a swift …
27th October 2020
Manufacturing output stuck well below February level The 0.6% m/m decline in industrial production in September isn’t necessarily a sign that the broader economic recovery is in jeopardy when we know that retail sales rose strongly last month. But it is …
16th October 2020
Consumer rebound still solid The unexpectedly strong 1.9% rise in retail sales last month suggests the economy was carrying more momentum into the fourth quarter than anticipated, defying fears that the expiry of enhanced unemployment benefits in the …
Core inflation held down by services weakness The more modest rise in core consumer prices in September, which came despite a further surge in used vehicle prices, suggests that the previous upward pressure on prices resulting from supply constraints may …
13th October 2020
Exports should begin to catch up soon The trade deficit widened further in August, as imports continued to rebound at a faster pace than exports but, with domestic production continuing to ramp up and overseas demand also recovering, we doubt this marks …
6th October 2020
Pace of recovery slowing The weaker than expected 661,000 rise in non-farm payrolls last month was in part due to a drop in government education employment but, with the pace of private payroll gains continuing to slow gradually, it is clear that the …
2nd October 2020
Manufacturing recovery has much further to run The modest decline in the ISM manufacturing index to 55.4 in September, from 56.0, suggests that manufacturing output will continue to grow at a relatively faster pace, as producers catch up with the …
1st October 2020
Details much stronger than headline figures suggest The 0.4% m/m rise in headline durable goods orders in August was weaker than we had been expecting, but the underlying details nevertheless show that business equipment investment staged a V-shaped …
25th September 2020
Sales growth inevitably slowing after rapid recovery The 0.6% m/m rise in retail sales in August was a bit weaker than we had expected, but isn’t a huge concern given that sales are now nearly 2% above their pre-pandemic level. (See Chart 1.) The expiry …
16th September 2020
Recovery in manufacturing begins to wane The muted 0.4% m/m increase in industrial production in August wasn’t quite as bad as it looks, with Hurricane Laura causing a temporary 2.5% m/m drop off in mining production and the return to seasonal …
15th September 2020
Dwindling inventory pushes vehicle prices sharply higher The outsized 0.4% m/m increase in core CPI in August was principally due to a 5.4% m/m surge in used motor vehicle prices which, unusually for this very early stage of the recovery, reflects …
11th September 2020
Recovery continues despite fading fiscal support The slighter softer 1,371,000 gain in non-farm payrolls in August was flattered by the hiring of 238,000 temporary workers for the 2020 Census and means that more than half of those who lost their jobs …
4th September 2020
Exports and imports rebounding in unison Both exports and imports rebounded sharply in July, but the bigger gain in the latter means that the trade deficit widened to $63.5bn, from $53.5bn. Net external trade is on track to be a drag on third quarter GDP, …
3rd September 2020
Production still struggling to keep pace with consumption The further rise in the ISM manufacturing index in August indicates that, while manufacturing production has continued to recover, it is still badly lagging the stronger turnaround in spending. The …
1st September 2020
Pandemic hit to core orders almost entirely reversed The sharp rise in durable goods orders last month was flattered by a surge in transport orders, but core orders are nevertheless almost back to the pre-pandemic level, suggesting that the recovery in …
26th August 2020
Manufacturing boosted by recovery in autos sector Despite the 3.0%m/m rise in industrial production in July, it remained 8.4% below its pre-pandemic February level, illustrating that the industrial recovery is still lagging behind the more impressive …
14th August 2020
Slowdown in consumption growth not as bad as it looks The details of the July retail sales report were rather better than the modest 1.2% headline gain let on and suggest that, while the recovery has lost pace, the slowdown has not been as sharp as we had …
Inflation rebounds as pandemic-related prices recover The 0.6% m/m surge in core consumer prices in July, which pushed the annual core CPI inflation rate back up to 1.6%, from 1.2%, should end any speculation that the pandemic-related slump in demand will …
12th August 2020
Recovery remains intact despite virus resurgence The 1,763,000 increase in non-farm payrolls in July confirms that, despite the resurgence in new coronavirus cases, the recovery remains firmly intact. With new infections now trending lower again and …
7th August 2020
Rebound in trade lagging the rest of the economy The latest trade figures confirm that both exports and imports finally began to rebound in June, and we could see continued rapid gains over the coming months as trade catches up with the strong initial …
5th August 2020
Recovery continues despite apparent slowdown in consumption The further rise in the ISM manufacturing index to 54.2 in July, from 52.6, suggests that output continued to rebound last month. Given that the recovery in production has lagged behind the …
3rd August 2020
Economic damage will take years to unwind The 32.9% annualised decline in GDP in the second quarter, more than three times larger than the previous record quarterly contraction, underscores the unprecedented hit to the economy from the pandemic. We expect …
30th July 2020
Investment continuing to rebound Another solid rise in durable goods orders in June left core orders just 3.7% below February levels, underlining how the hit to business investment during the pandemic has been relatively mild . Surveys suggest that …
27th July 2020
Spending almost back to pre-pandemic level The better-than-expected 7.5% m/m increase in retail sales in June suggests that the resurgence in coronavirus infections in the South and the West hadn’t yet had an impact on consumers. Admittedly, the high …
16th July 2020
Production catching up with stronger demand The 5.4% rise in industrial production last month was driven by an even stronger 7.2% gain in manufacturing output as producers, particularly in the auto sector, reopened factories to catch up with the …
15th July 2020
Initial disinflationary hit starting to reverse The rebound in consumer prices last month confirms that the disinflationary impact of the lockdowns in March and April is now going into reverse, but inflation is likely to remain muted over the coming …
14th July 2020
Job gains to slow significantly from here The 4.8 million increase in non-farm payrolls in June provides further confirmation that the initial economic rebound has been far faster than we and most others anticipated. But that still leaves employment 14.7 …
2nd July 2020
Factories quick to ramp up production as lockdowns ease The jump in the ISM manufacturing index to 52.6 in June, from 43.1, adds to the evidence that factory sector activity has recovered fairly quickly as the initial wave of lockdown measures has been …
1st July 2020
Investment rebounds, but exports and inventories continue to fall Consumption and investment rebounded strongly in May, as the lockdowns were eased, but the recovery in production has lagged behind, as manufacturing plants gradually reopened through the …
25th June 2020
Spending recovering quickly post-lockdown; production will follow The 17.7% m/m rebound in retail sales in May indicates that, as the lockdowns were eased in many states, activity started to recover more quickly than we – and others – had been …
16th June 2020