US Publications
Below is a list of our US Publications for the last 5 months. If you are looking for reports older than 5 months please email info@pantheonmacro.com, or contact your account rep
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Daily Monitor
- Real consumption likely rose 0.3% in February; unofficial data point to robust non-gas spending in March...
- ...But the lift to incomes from tax refunds will be over soon; lower stock prices will add to the headwinds.
- The February core PCE deflator likely rose 0.4%, due to residual seasonality and some volatile components.
- The biggest one-month jump in gas prices since at least 1957 likely boosted the headline CPI by 0.7pp.
- Airline fares probably jumped too, while used vehicle prices are overdue a rebound…
- …But prices for other services likely rose only modestly, justifying the FOMC’s wait-and-see stance.
- The shocks to energy and fertilizer markets mean that food prices will climb through spring and summer…
- …But even a 20% rise in wholesale food prices would only add around 0.1pp to headline CPI inflation.
- The ongoing surge in gas prices is a far bigger and more immediate worry for consumers and the Fed.
- February’s solid retail sales likely were lifted by the weather and a short-lived boost from tax refunds.
- The underlying trend probably is still soft, and looks set to slow further amid the shock to energy prices.
- We think consumption growth of around 2% in Q1 will be followed by unchanged spending in Q2.
- February’s JOLTS report continues to paint a very weak picture of labor demand.
- The Conference Board survey’s job numbers also suggest payroll gains will remain very sluggish…
- …Putting further upward pressure on unemployment and undermining wage growth.
- February retail sales likely were boosted by a rebound in auto sales and the impact of higher gas prices.
- Sales likely also were boosted by bigger-than-usual tax refunds and unseasonably warm weather.
- But the underlying trend in core sales is weak, and likely to step down further as the energy shock bites.
- Low claims reflect few layoffs, but hiring is still too weak to absorb fully modest growth in labor supply.
- March business surveys point to Q1 GDP growth of about 2% in Q1...
- ...But the jump in oil prices has triggered a surge in inventory building, supporting demand only briefly.
- The oil futures prices relevant for new capital investment have risen by much less than spot prices.
- Greater capital discipline means oil investment is less responsive to jumps in prices than in the past.
- Either way, oil and gas investment is a very small share of the overall economy.
- Calls that AI already justifies lower interest rates look ill-founded, given the limited productivity boost so far.
- AI might prove more disinflationary in the future, but the picture is highly uncertain.
- A faster “speed limit” for the economy seems more likely than much lower inflation and interest rates.
- The Q1 fall in households’ wealth implies a $50B hit to spending, equal to 0.2% of annual consumption.
- Spending on recreation services is closely correlated with changes in households’ wealth...
- ...and near-real time data indicate that food services spending is already taking a hit.
- Higher gas prices look set to reduce real household incomes by roughly $15B a month.
- Tax refunds will boost incomes by about $10B year-over-year in February to April, but taper off thereafter.
- Bigger refunds also will do little to help lower income households hit hardest by higher gas prices.
- The median FOMC member still expects to ease policy by 25bp this year, unchanged from December.
- The new, higher forecasts for core PCE inflation are plausible, but those for stable unemployment are not.
- PPI data show retailers have passed on all the tariff costs to consumers; margins back on track.
- We think headline CPI inflation would soar to 6% if oil prices hit $150, with core PCE inflation rising to 31/2%.
- The jump implies a hit to GDP of just over 1pp, probably lifting the unemployment rate to about 5%.
- We think the Fed would wait until next spring to deliver the 75bp easing we expect this year in our base case.
- FOMC participants will lift their Q4 forecasts for both core PCE inflation and the unemployment rate.
- The median participant likely will still expect 25bp easing this year, but risks are skewed to no cuts.
- We still look for 75bp easing, but have pushed back our forecast for the first cut to September.
- QCEW data suggest payrolls probably fell by about 10K per month in the six months to September.
- The gap between first and final payroll estimates is trending at about 70K, still big relative to history.
January’s jump in housing starts will unwind; population growth is slow and affordability
- stretched.
- The year-to-date increase in the core CPI is in line with its 2015-to-19 average.
- Airline fares and used auto prices will soar, but tariff pass-through is mostly over; rents will slow further.
- The core PCE deflator again likely rose more quickly than the core CPI in February, but will slow mid-year.
- The highest net balance of small business reported rising sales in February since May 2022...
- ...But elevated uncertainty is keeping capex intentions at multi-year lows, and hiring plans subdued.
- We are revising up our forecast for the January core PCE deflator; prices for legal services soared.
- The core CPI likely rose by 0.2% in February, despite the rebound in used auto prices.
- Nearly all the tariff costs have already come through; snowstorms likely weighed on clothing prices.
- The jump in oil prices to $85pb implies headline CPI inflation will shoot above 3% soon.
- Tax refunds are up only 10% year-over-year to date, far short of the near-30% rise we expected...
- ...But a meaningful boost to growth in consumers’ spending in H1 still looks likely.
- Layoff indicators remain subdued, but the renewed fall in NFIB hiring intentions implies weak job gains.
- The housing sector typically see the earliest and biggest boost from looser Fed policy…
- …But homebuilders face considerable headwinds, even if mortgage rates continue to fall.
- These constraints will blunt the boost from easier policy, making additional rate cuts more likely.
