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Falling inflation still driven by only a handful of categories The further fall in core consumer prices in May was mainly driven by continued declines in travel-sensitive categories including airline fares and motor vehicle insurance. There is still …
10th June 2020
Rise in payrolls suggests economy bouncing back quicker than anticipated The surprise 2.5 million rise in payroll employment last month indicates that the process of rehiring began sooner than the jobless claims figures suggested . With more states moving …
5th June 2020
Auto plant closures hit trade; claims still edging lower The international trade deficit widened to $49.4bn in April, from $42.3bn, as exports slumped by a massive 20.5% m/m, outpacing a 13.7% m/m decline in imports. The closure of motor vehicle …
4th June 2020
Surveys point to slow recovery post-lockdowns The modest rise in the ISM manufacturing index to 43.1 in May, from 41.5, echoes the message from the other surveys that factory-sector activity is recovering only gradually as lockdowns have started to ease. …
1st June 2020
Investment holding up much better than consumption The big drop in durable goods orders last month was once again driven mainly by plunging transport orders with underlying capital goods orders falling more modestly. Together with the drop in continuing …
28th May 2020
April to mark the low point, but recovery may only be gradual The 11.2% m/m fall in industrial production in April was bigger than at any point in the index’s 100-year history, including the Great Depression, the end of World War 2 and the Global …
15th May 2020
Virus hit to consumption even worse than we thought The 16.4% m/m plunge in retail sales last month leaves sales 21% lower than in February , a slightly bigger hit to consumption from the lockdowns than we had anticipated. Even with many states now easing …
Unprecedented price falls in lockdown-affected sectors The 0.8% m/m fall in consumer prices last month reflects the sharp drop in energy prices together with an unprecedented 0.4% m/m fall in core CPI. But the latter was largely due to very big declines …
12th May 2020
Unprecedented job loss illustrates extent of human tragedy The loss of 20.5 million jobs in April was largely as expected based on the tsunami of jobless claims and, although the unemployment rate only climbed to 14.7%, slightly below expectations, that …
8th May 2020
Exports and imports set for even bigger falls The widening in the trade deficit to $44.4bn in March, from $39.8bn, came as a further fall in imports was outpaced by a plunge in exports, with both driven by a collapse in international travel and tourism. …
5th May 2020
Surveys not capturing full extent of the downturn The drop in the ISM manufacturing index to 41.5 in April, from 49.1, was more modest than we and the consensus expected and leaves it at a level consistent with GDP falling at a 5% annualised pace , …
1st May 2020
Economy hit by unprecedented slump in services consumption Since the pandemic-related lockdowns only really began in earnest in the final two weeks of the quarter, the 4.8% annualised decline in GDP over the first quarter as-a-whole illustrates that …
29th April 2020
Slump reflects cancellation of aircraft orders The 14.4% m/m slump in durable goods orders in March was principally due to a massive 295.7% m/m decline in commercial aircraft orders, with core orders down by only 0.2%m/m. The upshot is that business …
24th April 2020
Sharpest fall since 1946; even worse to come in April The 5.4% m/m plunge in industrial production in March, which was the sharpest monthly fall since 1946, highlights that while coronavirus containment measures have primarily slammed the brakes on …
15th April 2020
Collapse in discretionary spending partly offset by grocery store surge The 8.7% fall in retail sales last month suggests that first-quarter real consumption declined by up to 5% annualised. As the lockdowns were only introduced in the middle of last …
Headline inflation to fall temporarily to zero The 0.4% m/m decline in consumer prices in March, which was principally due to a 10.5% m/m drop in gasoline prices, pushed the annual rate of headline CPI inflation down to 1.5%, from 2.3%. But that is just a …
10th April 2020
Unemployment set to surge above 10% The 701,000 plunge in non-farm payrolls in March, which is already close to the worst monthly declines during the Global Financial Crisis, suggests the coronavirus pandemic started to decimate the economy even sooner …
3rd April 2020
Manufacturing avoids big initial hit The marginal fall in the headline ISM manufacturing index to 49.1 in March, from 50.1, indicates that the initial hit to the factory sector from the coronavirus was more muted than feared. With many factories now …
1st April 2020
Business equipment investment weak before the virus hit The rise in durable goods orders in February reflected a surge in transport orders, with underlying capital goods orders and shipments falling back. That suggests business equipment investment was on …
25th March 2020
Coronavirus outbreak will hit activity hard The February retail sales data provide further evidence that the economy was in reasonable shape before the coronavirus struck, but that won't prevent spending from falling sharply over the next few months. The …
17th March 2020
Headline inflation will fall toward 1% The drop back in CPI inflation to 2.3% in February, from 2.5%, is a sign of things to come, with the plunge in crude oil prices likely to drag headline CPI inflation below 1.0% soon. With underlying price pressures …
11th March 2020
Economy in robust health ahead of coronavirus impact The 273,000 gain in non-farm payrolls in February confirms that the US economy was in very good shape before the coronavirus hit. Nevertheless, with the 10-year Treasury yield slumping to a new record …
6th March 2020
Disruption to manufacturing supply chains likely to worsen The modest fall in the ISM manufacturing index to 50.1 in February, from 50.9, leaves the index still above the levels seen over the second half of last year. Nevertheless, the survey clearly …
2nd March 2020
Business equipment investment rebounding Durable goods orders were held down last month by a plunge in volatile defence orders, but the surge in underlying capital goods orders and shipments suggests business equipment investment growth is beginning to …
27th February 2020
PMIs fall into recessionary territory The big fall in the Markit composite PMI, to the lowest level since the series began in late-2009, was driven by a plunge in the services index and will inevitably raise fears about the underlying health of the …
21st February 2020
Consumption soft patch unlikely to continue for long The unexpected weakness in underlying retail sales in January suggests that consumer spending is still struggling for momentum but, with jobs growth solid and consumer confidence resilient, we doubt …
14th February 2020
Core inflation going nowhere fast The continued stability of core CPI inflation in January supports our view that the Fed will not be raising interest rates again for the foreseeable future. The rise in headline inflation to a 15-month high of 2.5%, from …
13th February 2020
Payrolls boosted by mild weather; revisions not as bad as feared The 225,000 increase in non-farm payrolls in January suggests that employment benefitted from the unseasonably mild weather (it was the fifth warmest January on record), with the …
7th February 2020
Trade deficit widens; ADP boosted by weather The trade deficit widened to $48.9bn in December, from $43.7bn, as imports rebounded by 2.7% m/m, outpacing a 0.8% m/m gain in exports. The rebound in imports partly reflected the unwinding of disruptions in …
5th February 2020
Further evidence economy is turning a corner The sharp rebound in the ISM manufacturing index to a six-month high of 50.9 in January, from 47.8, echoes the message from the other surveys that the prospects for factory sector activity are starting to …
3rd February 2020
Growth holds steady despite weakness in private domestic sales The 2.1% annualised gain in fourth-quarter GDP was not quite as solid as it looked, with consumption growth slowing and business investment contracting for a third consecutive quarter. …
30th January 2020
Surveys suggest underlying orders will start to improve soon The December durable goods data suggest that business equipment investment fell again in the fourth quarter. But the recent improvement in the survey evidence suggests it should soon start to …
28th January 2020
Tentative manufacturing recovery has further to run The 0.3% fall in industrial production in December was entirely due to a weather-related slump in utilities output. The latest surveys suggest that the tentative recovery in manufacturing output is a …
17th January 2020
December sales surge undone by downward revisions to earlier months Retail sales increased by a moderate 0.3% m/m in December, as a price-related 2.8% m/m surge in the value of gasoline station sales helped to offset a 1.3% m/m drop back in motor vehicle …
16th January 2020
Stable inflation to keep the Fed on prolonged hold The more muted 0.1% rise in core consumer prices in December suggests that the trend in underlying inflation is still close to 2%. With wage growth also moderating in recent months, there will be little …
14th January 2020
Labour market conditions remain solid The slowdown in payroll growth to a solid 145,000 last month shows that the economy is still creating more than enough jobs to keep pace with population growth. With economic growth bottoming out and likely to …
10th January 2020
Net trade provides big boost to Q4 GDP growth The sharp narrowing in the trade deficit to $43.1bn in November, from $46.9bn, was driven by another fall in imports that will be reversed in the coming months. Nevertheless, net trade appears to have provided …
7th January 2020
Terrible ISM figures at odds with broader improvement in the data The further decline in the ISM manufacturing index in December, to its lowest level since June 2009, at face value suggests the US economy is teetering on the brink of recession. But it’s …
3rd January 2020
Weak orders suggest business equipment investment stagnant The unexpected 2.0% m/m decline in November’s durable goods orders was largely due to a massive slump in defence aircraft, alongside a small dip in commercial aircraft orders. Nevertheless, …
23rd December 2019
Surge in manufacturing output not just a GM story The 1.1% surge in manufacturing output last month reflected both a rebound in autos output following the end of the GM strike and a healthy gain in underlying production . Boeing’s decision to halt …
17th December 2019
Consumption growth likely to pick up again soon The disappointing 0.2% m/m rise in retail sales in November suggests that real consumption growth was a little weaker in the fourth quarter than the 2.0% annualised reading we had pencilled in, but solid …
13th December 2019
Muted inflation to keep the Fed on prolonged hold A rise in energy prices pushed headline CPI inflation up to a one-year high last month, but the stability of core inflation suggests that underlying price pressures remain subdued. In that environment, we …
11th December 2019
Holidays come early for the labour market The much stronger than expected 266,000 gain in non-farm payrolls in November was flattered by the return of 41,000 striking GM workers but, even allowing for that, it suggests labour market conditions remain …
6th December 2019
Net trade to boost fourth quarter GDP The sharp narrowing of the trade deficit, to a 16-month low in October, was distorted by a GM-strike related fall in auto imports and a big drop back in consumer goods imports, as the stockpiling ahead of the …
5th December 2019
Manufacturing still not out of the woods The small decline in the ISM manufacturing index to 48.1 in November, from 48.3, left it close to the decade-low reached in September. Despite the improvement some of the alternative manufacturing surveys and the …
2nd December 2019
Economic growth slowing less than feared The rise in durable goods orders last month was driven by a surge in orders for underlying capital goods, suggesting that business equipment investment is holding up better than anticipated . Together with the …
27th November 2019
Slump in autos & utilities will soon be reversed The 0.8% m/m plunge in industrial production last month was almost entirely due to the strike at GM and a weather-related fall in utilities output . With the strike now over, and much of the country hit …
15th November 2019
Consumption growth continues to slow gradually The 0.3% m/m rise in retail sales in October illustrates that while consumer spending growth is slowing gradually, it remains a relative bright spot. We expect real consumption growth to slow to between 2.0% …
No sign of tariff impact The larger 0.4% rise in consumer prices last month was mainly due to higher gasoline prices, with little sign of the September tariffs pushing up prices of consumer goods. If anything, underlying price pressures appear to be …
13th November 2019
Trade to remain a drag on growth The narrowing in the trade deficit to $52.5bn in September, from $55.0bn, confirms that net trade was broadly neutral for third-quarter GDP growth, although we expect it to become a renewed drag in the fourth quarter. The …
5th November 2019