- February’s subdued core PCE price data support the idea that January’s spike was a one-time fluke.
- Consumption is on track for a 2% gain in Q1, down from 3.3% in Q4, and real income growth is slowing
- A modest uptick in ISM manufacturing is a decent bet, but the sector remains weak.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - Manufacturing output is stabilising, but a real rebound remains distant
- EUROZONE - How will the ECB deal with inflationary fiscal tightening?
- U.K. - How fast and how far can the MPC cut interest rates?
- CHINA+ - Japan’s wage-price spiral still in its infancy; BoJ admits it moved early
- EM ASIA - CBC hikes to nip the impact of higher electricity tariffs in the bud
- LATAM - Banxico finally joins the LatAm easing party, but with caution
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- The March Philly Fed and S&P surveys suggest the manufacturing sector’s downturn is over...
- ...But ongoing inventory rundowns and depressed global demand point to only modest growth ahead.
- New home sales likely rose for a third straight month in February; homebuilders will hang on to market share.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - The wall between the Fed and the private sector is gone; rates now hurt
- EUROZONE - How resilient is the consensus position on the ECB?
- U.K. - No trigger for change by the MPC; rate cuts still a few months away
- CHINA+ - China’s credit data point to a dull economy; policy uplift yet to come
- EM ASIA - Raising our 2024 CPI forecast for India, and delaying the first RBI cut
- LATAM - Chile’s recovery to continue, along with robust external accounts
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- The shrinking stock of excess savings has exposed most households and small firms to the Fed’s hikes…
- Recent evidence of slowing growth is not yet definitive, but it has our attention.
- Nothing would shift market expectations of faster easing than a clear softening in payrolls; is it coming?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - Job growth is on the verge of a serious slowdown, perhaps in March
- EUROZONE - EZ economy at a standstill in Q4; Q1 will be better
- U.K.- Strong real incomes to deliver an economic rebound in 2024
- CHINA+ - NPC: China’s ramps up fiscal support, notably for industrial development
- EM ASIA - Be wary of extrapolating the solid start to 2024 in ASEAN’s PMI
- LATAM - Rapid disinflation in Mexico opens the door to a rate cut this month
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- The steady trend in job growth is set to take a serious turn for the worse, perhaps as soon as March.
- Soft March payrolls and two rounds of good inflation data would allow the Fed to ease in May.
- Congress has done the easy half of 2024 spending; expect more drama as the going gets tougher.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - Job growth is set to slow in spring, and cyclical job growth could stop
- EUROZONE - Services inflation too hot for an ECB rate cut in April; June it is then
- U.K.- Forecast Review: Sticky wage growth makes MPC cautious to cut
- CHINA+ - China’s Lunar New Year holiday-spending splurge won’t last
- EM ASIA - 8% growth in India unsustainable, with consumption still lacking
- LATAM - Brazil’s economy stagnates in H2; bold rate cuts still needed
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- Falling hiring plans and rising layoff fears signal a clear slowdown in spring payroll growth.
- Cyclical job growth appears likely to grind to a halt, leaving only demographics boosting employment.
- The ISM remains depressed and range-bound, but it is likely to break gradually to the upside in the spring.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - Q: Where is the AI boom in the GDP numbers? A: Fast approaching
- EUROZONE- Inflation to wobble around Easter; PMI implies recovery still coming
- U.K.- £20B package of tax cuts coming, despite fragile public finances
- CHINA+ - BoK edging towards a rate cut; Q3 still most likely timing
- EM ASIA - Chickens have come home to roost in Thai GDP; what an abysmal Q4
- LATAM - Banxico to act on further evidence of Mexico’s slowdown and disinflation
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- The AI boom is visible everywhere except in the GDP numbers, but that is about to change.
- AI spending is more likely to displace spending on opex—people—than other capex.
- New home sales likely were little changed in January, but a weather hit can’t be ruled out.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - Most of last week’s numbers tell us little about trends, or the outlook
- EUROZONE- Is the Eurozone falling behind the US on productivity, again?
- U.K.- Underlying Services Price Rises Still Slowing, Bolstering Rate Cut Hopes
- CHINA+ - China’s big five-year LPR cut signals focus on boosting home demand
- EM ASIA - Subianto’s decisive victory a short-term positive for continuity
- LATAM - December’s IBC-Br confirms activity in Brazil ended Q4 on a strong note
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- The closer we look at last week’s data, the less useful it appears to be as a guide to the future.
- The inflation picture is much better than the PPI and CPI data suggest; the Fed can relax...
- ...And the severe weather likely hurt retail sales, manufacturing output and housing starts, temporarily.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - Fiscal policy is likely to be a headwind for growth this year
- EUROZONE- Up close and personal with the seasonally adjusted EZ HICP data
- U.K.- Services CPI inflation likely rose above the MPC’s forecast in January
- CHINA+ - Chinese pricing trends signal weak activity; ignore the holiday noise
- EM ASIA - Vehicle sales boost to Singaporean retail sales set to unwind in January
- LATAM - Finally, Banxico explicitly signals rate cuts; normalisation to start in March
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- The CBO projects a substantial drop in the federal budget deficit this year; a headwind to growth.
- With households likely to slow the rundown of their pandemic savings too, weaker growth is a good bet.
- The annual CPI revisions were modest, and leave the clear downward trend in place.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - Whatever the truth about January jobs, the outlook for spring is weaker
- EUROZONE- Presenting the EZ bond market in 2024, assuming a soft landing
- U.K.- Multiple rate cuts this year signalled, but not as many as investors expect
- CHINA+ - Korea trade en route to a healthy recovery on strong WDA growth
- EM ASIA - Philippines’ consensus-beating Q4 benefited hugely from soft cushions
- LATAM - Central banks embrace policy normalisation, but with some caveats
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- Whatever really happened to payrolls in January, leading indicators point to much slower gains in Q2.
- The spike in hourly earnings likely reflects the mis-measurement of hours, not a rebound in the trend.
- The January data have killed any chance of a March Fed easing, but we still expect the first cut in May.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - Inflation is tamed, and that matters more to the Fed than strong growth
- EUROZONE- GDP data support a dovish shift from the ECB; Spanish CPI not so much
- U.K.- MPC likely to split the difference with the market
- CHINA+ - China’s RRR cut is about accommodating fiscal stimulus
- EM ASIA - Reassuring early Q1 PMIs in India
- LATAM - A busy but relatively straightforward week for LatAm central banks
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
- Consumption is on track for another solid increase in Q1, but cashflow growth is slowing…
- Spending growth likely will moderate in the spring, but a serious weakening requires rising layoffs.
- Core inflation is slowing on all fronts; faster margin compression would intensify the downward pressure.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- U.S. - The Fed wants to ease slowly, but their forecasts are too cautious
- EUROZONE- ECB to push back against market expectations this week
- U.K.- Consumer price rises still fading quickly enough for a May rate cut
- CHINA+ - China’s property sector still looking for the light at the end of the tunnel
- EM ASIA - Malaysian GDP to pick up in 2024 on manufacturing sector rebound
- LATAM - Brazil’s retail sector resilient in Q4, thanks to Black Friday
Ian Shepherdson (Chief Economist, Chairman and Founder)Global
