Net trade unlikely to be a major swing factor in Q4 GDP growth.
US
- The October PCE data likely will confirm that core disinflation continues, but still has a way to go.
- Spending growth appears to have moderated, though one softer month proves nothing.
- Jobless claims likely rebounded last week, though the Thanksgiving seasonals are tricky.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- 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, Chairman and Founder)US
The trend in new home sales is flattening.
US
- 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, Chairman and Founder)US
- 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, Chairman and Founder)US
Business equipment investment on course for another decline in Q4; too early to conclude that claims are flattening.
US
A new cycle low, but a modest rebound is coming soon.
US
- 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, Chairman and Founder)US
THE FED IS DONE, AND WILL START EASING IN SPRING...
- ...BUT THE FOMC WON’T ABANDON OPTIONALITY JUST YET
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- 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, Chairman and Founder)US
The recovery in construction activity is stalling, for now.
US
- 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, Chairman and Founder)US
Likely to improve from here, but only very slowly.
US
Most of the October weakness reflects the UAW strike; expect a November rebound.
US
Layoffs hit 12-week high, but remain below cycle peaks, for now
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- 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, Chairman and Founder)US
- 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, Chairman and Founder)US
The summer spending surge is fading.
US
