- Treat everything you read about holiday spending with great skepticism; reliable data don’t exist.
- Even the official retail sales numbers can’t be trusted until after at least one round of revisions.
- The trade deficit was wild during and immediately after Covid, but it’s much calmer now.
Ian Shepherdson (Chief Economist and Founder)U.S.
The trend in new home sales is flattening.
Kieran Clancy (U.S. Economist)U.S.
- Gas and stock prices have an outsized influence on consumers’ confidence indexes, politics matters too.
- The expectations subindexes historically have been a decent guide to real consumption spending.
- Monthly swings in new home sales are mostly noise, but the trend is now flattening.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Business CapEx looks to have stalled at the start of Q4, hit by rates and tight credit conditions.
- Equipment spending is on course to fall for a second straight quarter, with only modest gains elsewhere.
- Jobless claims surprised to the downside last week, but we expect a rebound in this week’s report.
Ian Shepherdson (Chief Economist and Founder)U.S.
Business equipment investment on course for another decline in Q4; too early to conclude that claims are flattening.
Kieran Clancy (U.S. Economist)U.S.
A new cycle low, but a modest rebound is coming soon.
Kieran Clancy (U.S. Economist)U.S.
- The upturn in jobless claims bears close attention, though it’s much too soon to panic.
- Ignore the wild durable goods headline; core capex orders are rising, but other data are less benign.
- Consumers’ sentiment likely will respond to cheaper gasoline; will inflation expectations do the same?
Ian Shepherdson (Chief Economist and Founder)U.S.
THE FED IS DONE, AND WILL START EASING IN SPRING...
- ...BUT THE FOMC WON’T ABANDON OPTIONALITY JUST YET
Ian Shepherdson (Chief Economist and Founder)U.S.
- The Homebase small business employment data point to a hefty rebound in November payrolls...
- ...But the margin of error in all payroll forecasts is huge; the seasonals are an intractable problem.
- No bottom yet for existing home sales, but supply is edging up, and valuations are falling as incomes rise.
Ian Shepherdson (Chief Economist and Founder)U.S.
The recovery in construction activity is stalling, for now.
Kieran Clancy (U.S. Economist)U.S.
- The supply-side factors we wanted to see in order to push inflation back down have all now normalized…
- Excess demand is the last piece of the jigsaw; the lagged hit from the Fed’s hike will take care of it.
- As demand moderates, gross margins will fall, pushing inflation back to target, and perhaps below it.
Ian Shepherdson (Chief Economist and Founder)U.S.
Likely to improve from here, but only very slowly.
Kieran Clancy (U.S. Economist)U.S.
Most of the October weakness reflects the UAW strike; expect a November rebound.
Kieran Clancy (U.S. Economist)U.S.
Layoffs hit 12-week high, but remain below cycle peaks, for now
Ian Shepherdson (Chief Economist and Founder)U.S.
- The rebound in jobless claims in recent weeks is not yet definitive evidence of a shift in the trend.
- The multi-family housing construction boom is over, though single-family starts are still rising.
- The steep drops in manufacturing output and homebuilder sentiment reported yesterday won’t last.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The House Continuing Resolution kicks the can down the road to January and February; it solves nothing.
- October's retail sales numbers are consistent with a clear slowing in Q4 consumption growth.
- PPI disinflation continues; the October numbers, alongside the CPI, signal a 0.25% core PCE print.
Ian Shepherdson (Chief Economist and Founder)U.S.
The summer spending surge is fading.
Kieran Clancy (U.S. Economist)U.S.
The (almost) final nail in the coffin of the Fed's rate hike optionality
Ian Shepherdson (Chief Economist and Founder)U.S.
