- The balance of risks points to a decent chance of a 0.2% core CPI print for March, a tenth below consensus.
- Zillow data signal a modest rise in primary rent; OER is wild but likely won’t rise much faster than primary rents.
- Both used vehicle and hotel room prices probably fell in March; the early Easter might depress goods prices too.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Revisions between the first and third payroll estimate have become bigger and increasingly negative.
- Under pressure SMEs likely are under-represented in the first estimate; expect larger downward revisions in Q2.
- We expect another fall in the NFIB index in March, as small businesses remain under pressure.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The initial March jobs numbers were even stronger than Homebase implied, but things can change…
- ...We’re sticking to our base-case view that payroll growth will slow markedly in the second quarter.
- Monetary tightening works with long lags, and multiple indicators now point to slower hiring and rising layoffs.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The Homebase jobs data signal March strength; we expect 225K headline payrolls and 175K private…
- ...But the NFIB survey’s hiring intentions measure points to much weaker numbers in Q2.
- Low snow cover likely boosted hours worked and depressed AHE, but the Fed only cares about the ECI.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Cost pressures ease further for services companies
Oliver Allen (Senior US Economist)US
- The plunge in ISM services prices paid to a four-year low points to much slower core services inflation.
- Light vehicle sales slumped in Q1, dragging on overall consumption growth.
- Initial jobless claims likely rose modestly last week, but a sharp increase is likely in the coming months.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Expect little change in the ISM services index today; either way, it’s a poor guide to services spending.
- The ADP employment report is hopelessly unreliable; take it seriously at your peril.
- The JOLTS quit rate is consistent with much weaker wage growth across the spring and summer, at least.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Core prices back on track; real after-tax income growth slowing sharply
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The JOLTS quit rate flagged the surge in wages during the Great Rehiring. It now points to a sharp slowdown.
- Vehicle sales were probably little changed in March, suggesting a drag on Q1 consumption growth.
- A nascent recovery in manufacturing is finding its feet, but core goods prices look set to continue falling.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- 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
- Expect a 0.3% core PCE, but surprises are possible; it’s impossible to replicate all the BEA’s methods.
- Quarterly real consumption growth looks on course for a meaningful slowdown in Q1.
- Governor Waller is in no rush to ease, but he is ignoring clear warning signs in the labor market numbers.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Easter data distortions ahead; lower claims numbers today will likely reflect tricky seasonal adjustment.
- Core durable goods orders are very likely to drop when Easter is in March, then rebound in April.
- We expect a pick-up in the March Chicago PMI, and look out for revisions to the Michigan sentiment data.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Further signs of a consumer slowdown.
Oliver Allen (Senior US Economist)US
THE LABOR MARKET IS ABOUT TO SLOW, SHARPLY…
- …THE FED WILL RESPOND, BUT WHEN?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
