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Manufacturers still struggling The muted rebound in the ISM manufacturing index to 48.3 in October, which left it only slightly higher than September’s decade low of 47.8, takes some of the shine off the better-than-expected payrolls data released earlier …
1st November 2019
Underlying pace of payroll gains rebounding The solid 128,000 gain in non-farm payrolls was more impressive than it looked given it was depressed by the GM strike and a census-related drop in Federal employment. Together with upward revisions to previous …
Slowing activity growth will keep the Fed cutting The 1.9% annualised increase in third-quarter GDP, down only marginally from the 2.0% gain in the second, was a little stronger than we had expected. But it still pushed the economy’s annual growth rate …
30th October 2019
GM strike plays only minor role in orders weakness The 1.1% m/m decline in durable goods orders in September was only partly due to the GM strike, with an unexpected decline in commercial aircraft orders and weakness in underlying orders also contributing …
24th October 2019
Output dragged down by GM strike The 0.4% m/m decline in industrial production in September was principally due to the GM strike, which dragged down autos production, and the unseasonably warm weather, which depressed utilities output. Nevertheless, aside …
17th October 2019
Underlying consumption growth slowing The drop back in retail sales in September was driven partly by a price-related drop in gasoline sales, but the fact that underlying control group retail sales were unchanged provides another clear sign that …
16th October 2019
No sign of tariff impact The muted gain in core consumer prices in September illustrates that, even after the introduction of additional tariffs on Chinese imports, inflationary pressures are still well contained. In that environment, a further slowdown …
10th October 2019
Employment growth easing rather than collapsing The 136,000 increase in non-farm payrolls in September illustrates that while growth in employment (and broader activity) has slowed, it is not collapsing. Otherwise, the employment report was something of a …
4th October 2019
The perfect storm of global weakness, trade war and GM strike The slump in the ISM manufacturing index to a decade low of 47.8 in September, from 49.1, will reignite fears that the US economy is headed for a recession. Our guess is that this deterioration …
1st October 2019
Consumption growth slowing; equipment investment stagnant The modest rise in personal spending in August suggests that third-quarter consumption growth was weaker than we had previously anticipated, while the durable goods data indicate that business …
27th September 2019
Manufacturing not out of the woods yet The stronger-than-expected 0.6% m/m rebound in industrial production in August, which was driven by manufacturing, suggests that the drag on US producers from weaker global demand may be starting to fade. But the …
17th September 2019
Underlying sales growth slows to more sustainable pace The 0.4% m/m increase in retail sales in August, which was well above the consensus expectation at 0.2% m/m, was helped by a suspicious looking 1.8% m/m increase in motor vehicle sales. Otherwise, …
13th September 2019
Core inflation hits 11-year high even before impact of latest tariffs The further rise in core CPI inflation to an 11-year high of 2.4% in August won’t stop the Fed from cutting interest rates again next week, but it does provide further reason to believe …
12th September 2019
Sharp slowdown in private job growth partly offset by temporary census hiring The 130,000 gain in non-farm payroll employment in August was flattered by the hiring of 25,000 temporary workers to help prepare for next year’s census. More generally, there …
6th September 2019
Net trade likely to remain a drag on GDP growth The small narrowing in the trade deficit in July was driven by a rise in exports and leaves net trade on track to be nothing worse than a small drag on GDP growth in the third quarter. But that drag is …
4th September 2019
Survey weakness will reinforce Fed’s trade war fears The fall in the ISM manufacturing index to 49.1 in August, from 51.2, left the index at its lowest level since January 2016 and points to another 25bp rate cut at the Fed’s meeting later this month. The …
3rd September 2019
Recession still confined to manufacturing The soft July industrial production data show that the manufacturing recession continued into the third quarter. But the latest surveys provide some reason for optimism and, as the retail sales data released …
15th August 2019
US consumer rides to the rescue (again) With the rest of the world sliding into the abyss, the July retail sales figures show a resurgent US consumer riding to the rescue once again . Even though the surge in retail sales in July was flattered by Amazon …
Rebounding core inflation unlikely to prevent further rate cuts The stronger than expected 0.3% m/m rise in core consumer prices in July, which followed a similar-sized gain in June, suggests that underlying inflationary pressures may not be as subdued as …
13th August 2019
Jobs growth trending lower The 164,000 gain in non-farm payrolls in July confirms that employment growth is trending lower, but it also suggests that the economy is still coping reasonably well amidst concerns over weaker global growth and trade policy …
2nd August 2019
Fed right to be concerned by weak global demand The further decline in the ISM manufacturing index to a three-year low of 51.2 in July, from 51.7, confirms that the downturn in the factory sector continued into the third quarter, and suggests that Fed …
1st August 2019
Slowdown limited by boost from consumption and government Second-quarter GDP growth slowed to 2.1% annualised, from 3.1% in the first, but that drop off would have been even bigger if not for a surprisingly strong gain in government expenditure. In short, …
26th July 2019
Stronger business investment offset by bigger drag from inventories The surge in durable goods orders in June suggests that business equipment investment is holding up a bit better than we anticipated. But with the incoming global data still deteriorating …
25th July 2019
Bounce in manufacturing output likely to be short-lived Industrial production was unchanged in June, as a weather-related drop in utilities output offset a 0.4% m/m rise in manufacturing output. But with global demand still weak, we doubt the latter …
16th July 2019
Underlying sales post strongest quarterly gain since 2005 The 0.7% m/m surge in underlying retail sales in June, along with upward revisions to previous months’ gains, suggests that real consumption growth accelerated to 4.0% annualised in the second …
Significant rebound in core inflation still looks unlikely The stronger 0.3% m/m gain in core consumer prices in June won’t prevent the Fed from cutting interest rates later this month and, in any case, we doubt that strength will be sustained. Headline …
11th July 2019
Payrolls too strong to justify immediate Fed rate cut The 224,000 gain in non-farm payrolls in June was much stronger than the consensus estimate of 160,000 and would seem to make a mockery of market expectations that the Fed will cut interest rates by up …
5th July 2019
Net trade likely to remain a drag on GDP growth The sharp widening in the trade deficit to $55.5bn in May, from $51.2bn, suggests that net trade was a slightly bigger drag on second-quarter GDP growth than we had previously anticipated, with the latter …
3rd July 2019
Manufacturing conditions still deteriorating Although the ISM manufacturing index didn’t fall as far as feared in June, the decline in the more forward-looking new orders component suggests the worst is still to come . The drop in the headline index to a …
1st July 2019
Orders weighed down by Boeing’s woes The 1.3%m/m decline in durable goods was largely a reflection of Boeing’s problems following the grounding of its 737 Max, with the rebound in underlying orders and shipments suggesting that business equipment …
26th June 2019