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7 September 2018 Are Chinese Efforts to Stabilise Growth Starving Private Firms (Publication Centre)

China's authorities recognised, around the middle of this year, that activity was slowing and that monetary conditions had become overly tight.

8 May 2018 Small Firms' Sentiment Likely has Weakened Further, but no Disaster (Publication Centre)

We're looking forward to today's April NFIB survey of activity and sentiment in the small business sector with some trepidation.

10 July 2018 Businesses' Capex Plans Set to Surge, Following Stronger Earnings (Publication Centre)

For some time now, we have puzzled over the softness of small firms' capital spending intentions, as measured by the monthly NFIB survey.

12 November 2018 How to Look Desperate in Trying to Stem China's Pledged Share Crisis (Publication Centre)

Last week, the Chinese authorities were out in force, talking up the economy and markets, and bearing measures to support private firms.

6 April 2017 Firms in the EZ are Investing Again, but What About Wages? (Publication Centre)

Readers have asked us about the availability of flow-of-funds data in the Eurozone similar to the detailed U.S. reports. The ECB's sector accounts come close and cover a lot of ground, but are also released with a lag. We can't cover all sectors in one Monitor, but the investment data for non-financial firms, excluding construction, suggest that investment growth slowed last year.

31 August. 2016 Cheaper Borrowing Costs Won't Reignite Firms' Investment Appetite (Publication Centre)

July's money and credit figures provided more evidence that firms have become reluctant to invest following the Brexit vote. Lending by U.K. banks to private non-financial companies--PNFCs--rose by just 0.2% month-to-month in July, below the average 0.5% increase of the previous six months.

4 July 2017 Will Firms Run Down Their Huge Cash Stockpiles Soon? (Publication Centre)

British firms have adopted a cautious mindset since the Brexit vote and are saving a huge share of their earnings, even though high profit margins make a strong case for investing more. Firms likely will run down their cash stockpiles when they become more confident about the medium-term economic outlook, potentially boosting GDP growth powerfully.

23 June. 2015 Oil Firms' Equipment Capex Can't Fall Forever - is it Close to Bottom? (Publication Centre)

We are intrigued by the idea that the rollover in oil firms' capital spending on equipment might already be over, even as spending on new well-drilling--captured by the still-falling weekly operating rigs data--continues to decline. The evidence to suggest equipment spending has fallen far enough is straightforward.

18 December 2017 Tankan Shows this is no Ordinary Japan, Are Animal Spirits Back? (Publication Centre)

The incidence of the phrase "since the early nineties" has increased sharply in our Japan reports this year.

13 July 2017 Don't Extrapolate from May's Uptick in Basic Wage Growth (Publication Centre)

Yesterday's labour market data gave sterling a shot in the arm on t wo counts. First, the headline, three-month average, unemployment rate fell to just 4.5% in May, from 4.6% in April.

15 October 2018 It's not Fun to Own EZ Equities this Year, but the ECB won't Blink (Publication Centre)

A bad year is threatening to become a catastrophic one for Eurozone equity investors.

14 November 2018 China's Potential H1 Recovery Just Fizzled out... Before it Started (Publication Centre)

Credit to the Chinese authorities for sticking it out with the marginal approach to easing for so long... at least two quarters.

14 November 2018 Still Enough Slack to Prevent Wage Growth From Rising Further (Publication Centre)

September's labour market report suggests that wage growth won't continue to rise for much longer.

12 July 2017 Yellen Will Re-affirm Fed Policy. Expect no Revelations, or Dates (Publication Centre)

Chair Yellen has become quite good at not giving much away at her semi-annual Monetary Policy Testimony.

12 December. 2016 Participation Won't Rise Enough to Prevent Higher Inflation (Publication Centre)

It appears to be something of an article of faith among economic advisors to President-elect Trump that substantial fiscal stimulus will generate faster growth without boosting inflation, because both labor participation and productivity growth will rise.

10 January 2018 Price-Level Targeting isn't Coming Soon, it's Likely not Coming at all (Publication Centre)

Judging from our inbox, the idea that the Fed might switch to some form of price level targeting, replacing its current 2% inflation target, is the big new idea for 2018.

1 May 2018 China's Manufacturing PMI Points to Reflation Revival Temporarily (Publication Centre)

China's official manufacturing PMI implies a modest gain in momentum in Q2, at 51.4, compared with 51.0 on average in Q1.

11 July 2017 Unemployment Likely Fell Again in May, Despite the Slowing Economy (Publication Centre)

May's labour market figures, released on Wednesday, likely will have something for both the doves and the hawks on the MPC , who have been wrangling over whether to reverse last year's rate cut.

12 April 2017 Mexico's Industrial Sector Resilient in Q1, Despite External Threats (Publication Centre)

Yesterday's industrial production report in Mexico added weight to the idea that the sector improved marginally in the first quarter, despite many external threats. Industrial output rose 0.1% month-to-month in February, following a similar gain in January. The calendar-adjusted year-over-year rate rose to -0.1%, after a modest 0.3% contraction in January.

18 October 2017 China Won't Solve its Leverage Problem Until Rates Rise (Publication Centre)

Money and credit data released last weekend suggest that China's demand for credit remains insatiable.

12 January 2017 Eurozone Equities in 2017: Another Year of Dashed Hopes? (Publication Centre)

A strong December didn't change the story of another year of Eurozone equity underperformance in 2016. The total return of the MSCI EU, ex-UK, last year was a paltry 3.5%, compared to 11.6% and 10.6% for the S&P 500 and MSCI EM respectively. In principle, the conditions are in place for a reversal in this sluggish performance are present. Equities in the euro area do best when excess liquidity--defined as M1 growth less GDP growth and inflation--is rising.

15 August 2017 The German Economy Fired on All Cylinders in the First Half of 2017 (Publication Centre)

Today's advance Q2 GDP report in Germany will add evidence that the EZ economy performed strongly in the first half of 2017. We can be pretty sure that the headline will be robust. The German statistical office reports a confidential number to Eurostat for the first estimate of EZ GDP--two weeks ahead of today's data--which was a solid 0.6%.

6 July 2018 Finally, a Bit of Good News in German Manufacturing (Publication Centre)

Demand in German manufacturing rebounded strongly midway through the second quarter.

6 December 2017 Don't Take Seriously Surveys Pointing to Faster Q4 GDP Growth (Publication Centre)

November's Markit/CIPS surveys for the manufacturing, construction and services sectors suggest that GDP growth is on track to strengthen a touch in Q4.

5 July 2018 Beware Inferring Too Much From June's Slightly Stronger PMIs (Publication Centre)

The pick-up in the Markit/CIPS services PMI to an eight-month high of 55.1 in June, from 54.0 in May, has provided another boost to expectations that the MPC will raise Bank Rate at its next meeting on August 2.

2 February 2018 January Job Gains Likely Solid, Calendar Effects to Subdue AHE? (Publication Centre)

The case for expecting a robust January jobs number is strong, but it is not without risks.

7 March 2018 The Eurozone has a lot to lose from a trade war (Publication Centre)

We are surprised by the EU's reaction to Mr. Trump's announcement that the U.S. will impose tariffs on steel and aluminium.

8 January 2018 Corporates' Cash Piles: a Future Source of Growth? (Publication Centre)

Business investment held up surprisingly well last year.

8 January 2018 Japan's Services Sector will Pick Up in Q1, Wage Pressure Mounts (Publication Centre)

Japan's services sector PMI last week was disappointing.

8 August 2017 Watch the NFIB Survey for Clues to Job Growth, Capex and Inflation (Publication Centre)

The NFIB survey of small businesses today will show that July hiring intentions jumped by four points to +19, the highest level since November 2006. The NFIB survey has been running since 1973, and the hiring intentions index has never been sustained above 20.

4 April 2018 Japan's Tankan Points to Building Inflationary Pressure (Publication Centre)

The Tankan survey--published on Monday--points to still buoyant sentiment, a further tightening of the labour market, and building inflation pressures.

6 September 2018 Does the Caixin Services PMI Pick up Activity Missing from GDP (Publication Centre)

The Caixin services PMI fell to 51.5 in August, from 52.8 in July.

22 February 2018 Jobless Claims Still Under Downward Pressure, Labor is Scarce (Publication Centre)

We have learned over the years not to become too excited in the face of swings in the jobless claims numbers, even when the movement appears to persist for a month or two.

20 Jan. 2016 Wage Growth Will Push the "Data Driven" Governor to Hike this Year (Publication Centre)

Bank Governor Mark Carney reiterated in a speech yesterday that he wants to see sustained momentum in GDP growth, domestic cost pressures firm and core inflation rise further towards 2%, before raising interest rates. We doubt he will have long to wait on the last two points, given the tightness of the labour market.

30 October 2018 Are Chinese Pro ts Normalising But the Headwinds Remain (Publication Centre)

Chinese headline industrial profits data show that growth slowed to just 4.1% year-over-year in September, from 9.2% in August.

2 January 2018 BoJ: Chinese Profit Story Deteriorates Amid Surprisingly Robust PMIs (Publication Centre)

China's official PMIs paint a picture of robust momentum going into 2018 but we find this difficult to reconcile with the other data.

26 September 2018 Is the French Economy Still on Track For a Rebound in H2 (Publication Centre)

Yesterday's barrage of French business sentiment data was mixed.

29 March 2018 Another Big Fall in the Saving Rate Likely Boosted GDP Growth in Q4 (Publication Centre)

The national accounts, released today, likely will restate that quarter-on-quarter GDP growth held steady at 0.4% in Q4.

30 Oct. 2015 Can the Recovery in Business Investment Maintain Its Pace? (Publication Centre)

Business investment has punched above its weight in the economic recovery from the crash of 2008; annual real growth in capex has averaged 5% over the last five years, greatly exceeding GDP growth of 2%. This recovery is unlikely to grind to a halt soon, since profit margins are still high and borrowing costs will remain low. But corporate balance sheets are not quite as robust as they seem, while capex in the investment-intensive oil sector still has a lot further to fall.

3 October 2018 Investment is Dropping, but Don't Rule out a Rebound Next Year (Publication Centre)

One of the more disheartening aspects of the Q2 national accounts, released last week, was the downward revision to business investment. Quarteron-quarter growth was revised to -0.7%, from +0.5% previously.

28 November 2017 Chinese Profits Headline Overstates Growth. Private Firms Struggling (Publication Centre)

Chinese industrial profits growth officially edged down to 25.1% year-over-year in October, from 27.7% in September. This is still very rapid but we think the official data are overstating the true rate of growth.

28 September 2017 Is Business Capex Finally Breaking to the Upside, led by Small Firms? (Publication Centre)

We have been waiting a long time to see signs that business investment spending is becoming less reliant on movements in oil prices.

25 June. 2015 When Will Small Firms Run Out of Labor Market Insiders to Hire? (Publication Centre)

The high and rising proportion of small businesses reporting difficulty in filling job openings is perhaps the biggest reason to worry that the pace of wage increases could accelerate quickly. If they pick up too far, the Fed's intention to raise rates at a "gradual" pace will be upended. The NFIB survey of small businesses--mostly very small--shows employers are having as much trouble recruiting staff as at the peak of the boom in 2006.

4 May. 2016 Eurozone Manufacturing Firms' Selling Prices Continue to Fall (Publication Centre)

Eurozone manufacturing selling prices remain under pressure from deflationary headwinds. The PPI index, ex-construction, in the euro area fell 4.2% year-over-year in March, matching February's drop. Weakness in oil prices continues to drive the headline.

27 September 2018 Fed Confirms December Rate Hike (Publication Centre)

The Fed is on course to hike again in December, with 12 of the 16 FOMC forecasters expecting rates to end the year 25bp higher than the current 2-to-21⁄4%; back in June, just eight expected four or more hikes for the year.

8 Dec. 2015 Small Firms Are Struggling to Recruit, and Price are Nudging Up (Publication Centre)

The release of the NFIB survey at 6.00AM eastern time this morning--really, they need a new PR advisor--doubtless will bring a flurry of headlines about rising wage pressures, with the expected compensation index rising by a startling three points to a new post-crash high. But this is not news, nor is the high, stable level of hiring intentions; these key labor market numbers were released last week in the NFIB Jobs Report, which appears the day before the official employment report. The data are simply extracted from the main NFIB survey.

25 April 2017 Mexico's IGAE Confirms a Surprisingly Firm Economy in Q1 (Publication Centre)

Economic activity in Mexico during the past few months has been stronger than most observers expected. Growth has certainly moderated from the relatively strong pace recorded during the second half of last year, but data for January and February show that it is still quite strong.

9 July. 2015 Oil Firms' Capex Rollover is Almost Over, Provided Prices Stabilize (Publication Centre)

After 29 straight weekly declines, the number of oil rigs in operation in the U.S. rose to 640 in the week ended July 2, from 628 the previous week, according to oil services firm Baker Hughes, Inc. If today's report for the week ended July 9 shows the rig count steady or up again, it will b e much easier to argue that the plunge in activity since the peak--1,601 rigs, in mid-September--is now over.

7 Oct. 2015 Banxico Confirms No Rush to Hike Interest Rates, With the Fed on Hold (Publication Centre)

The September Banxico minutes restated that the U.S. Fed's first interest rate hike is the key event awaited by Mexican policymakers. Banxico's board of governors voted unanimously on September 21st to keep the main interest rate at a record-low 3%.

7 June 2018 Japanese Firms Have Hiked Pay to Retain Workers (Publication Centre)

Japan's average year-over-year wage growth slowed sharply in May, but this mainly was a correction of the April spike.

5 October 2017 ADP Confirms that Hurricanes hit Payrolls (Publication Centre)

The ADP employment report for September showed private payrolls rose by 135K, trivially better than we expected.

14 March 2018 Mean Reversion in the CPI Confirms January's Core Jump was a Fluke (Publication Centre)

A significant minority of investors were betting on a repeat of January's outsized 0.349% increase in the core, judging from the immediate market reaction to the release of the February CPI report.

12 May. 2015 Small firms in better shape than NFIB suggests - Rebound due (Publication Centre)

On the face of it, small business have taken quite a hit over the past few months. The headline index from the NFIB survey of small businesses has dropped to a nine-month low of 95.2 in March from 100.4 in December. As a result, the gap between the NFIB and the ISM manufacturing indexes, which had been narrowing, has widened again.

11 April 2017 Why are Small Firms' Capex Plans so Soft even as Sentiment Soars? (Publication Centre)

Nowhere is the gap between sentiment and activity wider than in the NFIB survey of small businesses. The economic expectations component leaped by an astonishing 57 points between October and December, but the capex intentions index rose by only two points over the same period, and it has since slipped back. In February, the capex intentions index stood at 26, compared to an average of 27.3 in the three months to October.

10 Feb. 2015 Small Firms are Back in Business, But They Can't Find Staff (Publication Centre)

The headline index in today's NFIB small business survey probably won't quite converge with the ISM manufacturing index, but it will come v ery close. To close the gap completely, for the first time since the crash, the NFIB needs to rise to just over 102, from 100.4.

18 May. 2015 A Dovish Mr. Draghi Confirms Pledge to Implement QE in Full (Publication Centre)

Comments by Mr. Draghi in Washington last week point to a high bar for an adjustment to the QE program. The ECB president noted that while asset purchases and negative interest rates have driven a notable improvement in confidence and asset prices, the real key to the central bank's policies' success is a lasting boost to investment, consumption and inflation.

13 February 2018 China's Firms Mindful of Intensified Enforcement of Financial Regulation (Publication Centre)

Chinese monetary conditions remain tight. Systemic tightening through higher interest rates last year is playing a role, but intensified and ever- more public regulatory enforcement is becoming the primary driver of tightening credit conditions for businesses.

10 June. 2015 Tightening Labor market pushing up small firms' pricing plans? (Publication Centre)

The May NFIB survey and the April JOLTS report, both released yesterday, paint a coherent, if not yet definitive, picture of labor market developments which should alarm the Fed. The data suggest that the true labor supply, in the eyes of potential employers, is much smaller than implied by the BLS's measures of broad unemployment.

14 Jan. 2015 - Small Firms Recovery Accelerates, but Labor Costs are Rising (Publication Centre)

Yesterday's data were second-tier in the eyes of the markets, but not, perhaps in the eyes of the Fed. The continued surge in job openings, which reached a 14-year high in December, means that the Beveridge Curve--which links the number of job openings to the unemployment rate--shows no signs at all of returning to normal.

16 May 2017 Upbeat March's Data in Brazil Confirms the Recession is Over (Publication Centre)

Economic data released yesterday underscored that Brazil emerged from recession in the first quarter, but further rate cuts are needed. Indeed, the monthly economic activity index--the IBC-Br--fell 0.4% monthto- month in March, though this followed a strong 1.4% gain in February.

14 March 2017 Small Firms are Happy, but When Will Their Capex Plans Pick up? (Publication Centre)

Small businesses remain extremely positive about the economy, but some of the post-election gloss appears to be wearing off. To be clear, the headline composite index of small business sentiment and activity in February, due this morning, will be much higher than immediately before the election, but a modest correction seems likely after January's 12- year high.

21 February 2017 Fiscal Policy Won't Be Eased, Even If January's Surplus is Huge (Publication Centre)

January's public finance data, released today, take on particular importance because they are the last to be published before the Chancellor delivers his first Budget on March 8. The public finances nearly always swing into surplus in January, primarily because the deadline for individuals to submit self-assessment--SA--tax returns for the previous fiscal year is at the end of the month. Firms also pay their third of four payments of corporation tax for their profits in the current fiscal year.

21 Dec. 2015 Paris Attacks Unlikely to Dent Q4 French GDP Growth Severely (Publication Centre)

Manufacturing confidence in France remained resilient in the fourth quarter. The INSEE sentiment index rose to 103 in December from 102 in November, lifted by a jump in firms' own production expectations, and a small increase in the new orders-to-inventory ratio. We think production will increase in Q4, lifted by energy output, but the recent jump in the year-over-year rate is unlikely to be sustained, even if we factor in the marginal increase in new orders this month.

20 May. 2016 Let the Good Times Roll in EZ Corporate Bond Markets (Publication Centre)

Markets have responded strongly to the ECB's announcement that it will be buying corporate bonds as part of QE. Net corporate debt issuance of non-financial firms jumped €16B in March, the biggest monthly increase since January 2014. The 12-month average, however, was stable at €3.6B, and a sustained increase in net debt supply partly depends on firms' appetite for financial engineering

21 September 2016 Still Little Scope for Optimism on Business Investment (Publication Centre)

If the economy is to enter recession, falling business investment probably will have to be the main driver. Growth in consumer spending likely will slow sharply over the next year as firms become more cautious about hiring new workers and inflation begins to exceed wage growth again.

22 Apr. 2015 Do rising Inventories pose a threat to growth? (Publication Centre)

A classic indicator of impending recession is the emergence of excessive levels of inventory across the economy. The pace of businesses inventory accumulation typically lags sales growth, so when activity slows, usually in response to higher interest rates, firms are left with unsold goods.

2 Sept. 2015 August ADP and Official Payrolls Likely to be sub-200K (Publication Centre)

As a general rule, the best forecast of ADP payrolls in any given month is the official estimate for private payrolls in the previous month. This partly reflects the simple observation that payroll trends, once established, tend to persist, but it also is a consequence of ADP's methodology. The ADP number is generated from a model which combines both data collected from firms which use ADP for payroll processing, and lagged official data. The latter appear to be more important in determining in the month-to-month swings in the ADP number. ADP does not hide the incorporation of lagged official data in its model--you can read about it in the technical guide to the report--but neither does it shout it from the rooftops.

23 September 2016 French Manufacturing Confidence Rebounds Solidly in September (Publication Centre)

French manufacturers recovered their optimism towards the end of Q3. The headline INSEE manufacturing sentiment index rose to 103 in September, from 101 in August, and the composite business confidence gauge also increased. A rebound in transport equipment firms' own production expectations was the key driver of the recovery.

23 May. 2016 Will Profit Margins in Germany be Squeezed by Higher Wages? (Publication Centre)

Margins for German manufacturing firms remained depressed at the start of the second quarter. The headline PPI rose 0.1% month-to-month in April, pushing the year-over-year rate down marginally to -3.1% from a revised -3.0% in March. Falling energy prices are the key driver of the overall decline in the PPI.

11 October 2018 Weak GDP in August Sets the Tone for the Rest of this Year (Publication Centre)

The stagnation of GDP in August, following five consecutive month-to-month gains, confirms that the economy's momentum in prior months was simply weather-related.

1 Dec. 2015 Plunging Oil Prices Shift Income to Consumers From Producers (Publication Centre)

The big story in global macro over the past 18 months or so has been the gigantic transfer of income from oil producers to oil consumers. The final verdict on the net impact of this shift--worth nearly $2T at an annualized rate--is not yet clear, because the boost to consumption takes longer than the hit to oil firms ' capex, which began to collapse just a few months after prices began to fall sharply. But our first chart, which shows oil production by country as a share of oil consumption, plotted against the change in real year-over-year GDP growth between Q2 2014 and Q2 2015, tells a clear story.

1 August 2017 Money Data Show Diverging Household and Corporate Fortunes (Publication Centre)

The latest money and credit data highlight that the financial fortunes of firms and households have begun to differ markedly. Private non- financial corporations--PNFCs--are enjoying strong growth in their broad money holdings. The 1.2% month-to-month increase in PNFC's M4 was the largest rise since August 2016, and it lifted the year- over-year growth rate to 9.3%, from 9.0% in May.

02 Feb. 2016 Is the Recovery in Business Investment About to Fizzle Out? (Publication Centre)

Business investment has been resilient to the slowdown in the wider economy so far, with year-over-year growth in the first three quarters of 2015 averaging a very respectable 6.2%. Outside the oil sector, firms are generating healthy profits and can borrow cheaply.

10 Mar. 2015 Can the Uptick in New Home Sales be Sustained? (Publication Centre)

The key labor market numbers from today's February NFIB report on small businesses--hiring intentions and the proportion of firms with unfilled job openings--were released last week, as usual, ahead of the official jobs report.

24 February 2017 Is Sterling's Depreciation a Blessing or a Curse for Profits? (Publication Centre)

This week's GDP figures showed that firms invested only sparingly in 2016, but their financial fortunes have been bolstered by a recovery in profits. The gross operating surplus of all firms rose by 4.5% quarter-on-quarter in Q4, the biggest increase for 11 quarters. This pushed the share of GDP absorbed by profits up to 21.3%, just above its 60-year average of 21.2%.

14 November 2017 NFIB Survey set to Rebound After the Hurricane Hit, Capex Strong? (Publication Centre)

The minutes of the September 19/20 FOMC meeting record that "...it was noted that the National Federation of Independent Business reported that greater optimism among small businesses had contributed to a sharp increase in the proportion of small firms planning increases in their capital expenditures."

14 December 2016 Labour Data Set to Show a Clearer Deteriorating Trend (Publication Centre)

Today's labour market figures likely will bring further signs that firms are recruiting more cautiously and limiting pay awards, due to still-elevated economic uncertainty.

13 April 2017 Slowing Labour Income Growth Highlights Consumers' Woes (Publication Centre)

Yesterday's labour market data showed that growth in households' income has slowed significantly in recent months. Firms are both hiring cautiously and restraining wage increases, due to heightened uncertainty about the economic outlook and rising raw material and non-wage labour costs. Consumers' spending, therefore, will support GDP growth to a far smaller extent this year than last.

16 May 2018 Better Fundamentals and Fading Political Risk to Support Colombia (Publication Centre)

Colombia's Q1 GDP report confirms that the economy is improving. Leading indicators and survey data suggest that the recovery will continue over the second half of the year.

28 July. 2016 Acceleration of Q2 GDP Won't Have Much Bearing on Stimulus Debate (Publication Centre)

Taken at face value, the preliminary estimate of Q2 GDP suggests that the economic recovery weathered Brexit risk well. But growth received support from some unsustainable sources, and also probably was boosted by a calendar quirk. Meanwhile, with few firms or consumers expecting a vote for Brexit prior to the referendum, Q2's brisk growth tells us little about how well the economy will cope in the current climate of heightened uncertainty.

7 Oct. 2015 Are Payrolls Slowing Because There's No-one Left to Hire? (Publication Centre)

In the absence of market-moving data today, we want to take a closer look at the labor market, and, specifically, the idea that payroll growth is slowing because firms cannot find staff they consider suitably qualified for the jobs available. Every indicator of labor demand, with the sole exception of manufacturing-specific surveys, is consistent with very rapid payroll growth, well in excess of 200K per month.

6 September. 2016 Too Soon to Breathe a Sigh of Relief on Recession Risk (Publication Centre)

The improvement in the August services PMI has generated hyperbolic headlines suggesting the U.K. is on a tear despite the Brexit vote. Taken literally, however, the PMIs suggest that the revival in business activity in August only partially reversed July's decline. Meanwhile, the impact of sterling's sharp depreciation on the purchasing power of firms and consumers has only just begun to be felt.

25 Nov. 2015 Q3 Inventory Revisions Limit the Potential for Q4 Growth Rebound (Publication Centre)

The hefty upward revision to Q3 inventories means we have to lower our working assumption for fourth quarter GDP growth, because the year-end inventory rebound we previously expected is now much less likely to happen. Remember, the GDP contribution from inventories is equal to the change in the pace of inventory accumulation between quarters, and we're struggling to see a faster rate of accumulation in Q4 after the hefty revised $90B third quarter gain. Inventory holdings are in line with the trend in place since the recession of 2001; firms don't need to build inventory now at a faster pace.

8 Dec. 2015 Productivity Growth Still too Weak to Prevent Inflation Rebound (Publication Centre)

By any yardstick, U.K. productivity growth has been terrible in recent years. Output per hour exceeded its pre-recession peak only in the second quarter of 2015, and it has grown at an average annual rate of just 0.6% this decade. U.S. productivity growth has been equally dismal since 2010. But the U.K.'s performance is more worrying, because the productivity slump during the recession suggested scope for a period of catch-up. In the U.S., by contrast, productivity surged during the recession as firms cut headcount sharply.

8 February 2018 Japanese Wage Cost Pressures are Building, but the Yen is Competitive (Publication Centre)

Japanese firms hand out a significant portion of labour compensation through bonuses, with the largest lump awarded in December.

9 November 2018 Stockbuilding Won't Temper the Near-Term Slowdown (Publication Centre)

A flawed theory still is circulating that the economy might outperform over the next two quarters because firms will stockpile goods due to the risk of a no-deal Brexit.

9 June. 2016 Eurozone Credit Markets Cheer as ECB Private QE Begins (Publication Centre)

The ECB's corporate bond purchase program began yesterday with purchases concentrated in utilities and telecoms, according to media sources. This is consistent with the structure of the market, and the fact that bond issues by firms in these sectors are the largest and most liquid. But debt issued by consumer staples firms likely also featured prominently.

4 July 2017 Mr Abe Trounced in Tokyo Elections just as Recovery Gains Traction (Publication Centre)

The Tankan survey powered ahead in Q2, pulling away from Q1 and mostly beating consensus. This confirms our impression of the strength of the recovery ,just as Prime Minister Abe's Liberal Democratic Party is trounced at the polls in Tokyo. The drubbing is understandable as the main benefits of Abenomics have gone to the business sector, at the expense of the household sector.

6 April 2017 ADP Likely Overstates Payrolls, ISM Non-manufacturing Understates (Publication Centre)

We don't directly plug the ADP employment data into our model for the official payroll number. ADP's estimate is derived itself from a model which incorporates lagged official payroll data, because payrolls tend to mean-revert, as well as macroeconomic variables including oil prices, industrial production and jobless claims -- and actual employment data from firms which use ADP's payroll processing services.

31 August. 2016 ADP Likely to Report Strong August Payrolls, But it's Unreliable (Publication Centre)

We are expecting a hefty increase in the August ADP employment number today--our forecast is 225K, above the 175K consensus --but we do not anticipate a similar official payroll number on Friday. Remember, the ADP number is based on a model which incorporates lagged official employment data, the Philly Fed's ADS Business Conditions Index, and data from firms which use ADP for payroll processing.

27 November 2018 What's the Risk of a Technical Recession in Germany (Publication Centre)

Last week's detailed Q3 GDP data in Germany verified that GDP fell 0.2% quarter-on-quarter, down from a 0.5% rise in Q2, a number which all but confirms the key story for the economy over the year as a whole.

29 March 2017 Banxico to Hike Tomorrow Despite the MXN's Rebound this Year (Publication Centre)

LatAm currencies have risen against the USD so far this year, easing the upward pressure on imported good prices and allowing most central banks to cut interest rates. The first direct effects of stronger currencies should be felt by firms which import high-turnover intermediate or final goods.

27 Oct. 2015 Capital Goods Orders are Stabilizing, at Least - Oil Hit Fading (Publication Centre)

The durable goods numbers were among the first short-term indicators to warn clearly of the hit to manufacturing from the rollover in oil sector capex, which began last fall. The trend in core capital goods orders was rising strongly before oil firms began to cut back, with the year-over-year rate peaking at 11.9% in September. Leading capex indicators in the small business sector remained quite robust, but just nine months later, core capex orders were down 6.4% year-over-year, following annualized declines of more than 14% in both the fourth quarter of 2014 and the first quarter of this year.

3 August. 2016 Fundamentals Don't Matter For The EZ's Mighty Corporate Bonds (Publication Centre)

Debt issuance by Eurozone non-financial firms is soaring, consistent with the ECB's hope that adding private debt to QE would boost supply. Our first chart shows that the three-month sum of net debt sold in the euro area jumped to a new record of €60.3B in May. A short-term decline in issuance is a good bet after the initial euphoria in firms' treasury departments.

30 November. 2016 Recovery in Lending Unlikely to Maintain October's Momentum (Publication Centre)

October's money data show that households and firms have regained the appetite for borrowing that they lost immediately after the referendum. But the recent rise in swap rates and the deterioration in consumers' confidence likely will cut short the revival in consumer lending, while persistent Brexit uncertainty likely will continue to subdue firms' investment intentions.

30 August 2017 ADP Looks set to Report Another Solid Gain in Payrolls (Publication Centre)

We're expecting a hefty increase in private payrolls in today's August ADP employment report. ADP's number is generated by a model which incorporates macroeconomic statistics and lagged official payroll data, as well as information collected from firms which use ADP's payroll processing services.

Guardian - UK factory output grows at fastest rate since mid-1990s (Media Centre)

Chief U.K. Economist Samuel Tombs on the U.K. CBI Industrial Trends Survey

Guardian - UK consumers face sharpest price rise in services for nearly a decade (Media Centre)

Chief U.K. Economist Samuel Tombs on U.K. Price Increases

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