- The FOMC likely will stick to its December forecast of 75bp easing this year.
- FOMC members’ inflation forecasts probably will be little changed, despite recent data disappointment.
- Homebuilders are gaining market share, keeping single-family construction on an upward track.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Homebase points to solid March job growth, but likely slower than in February…
- Either way, the outlook for the second quarter is materially weaker; hirings down, firings up.
- Housing construction is set to rise as homebuilders gain market share; is the multi-family slump over?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- 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
Disappointing enough to make a first easing in May much less likely
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Downward revisions and a muted February recovery signal an emerging consumer slowdown.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The January and February retail sales numbers signal a sharp slowdown in consumption in Q1.
- Core PPI inflation has flattened recently, but weaker consumption will drag down margins later this year.
- Expect a rebound in February manufacturing output, but it will mostly be a weather-related story.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- February retail sales likely rebounded after January’s weather hit, but look out for revisions
- Downside risk for February’s core PPI, but the data are much noisier than the CPI numbers.
- Jobless claims are still tracking sideways, but an array of indicators points to a clear increase in the spring.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- February’s core CPI was less bad than January’s, but unhelpful to the case for an early Fed rate cut.
- Nothing is yet definitive, given how much inflation and labor market data will appear before the May FOMC.
- Small firms are much less cheerful than implied by the stock rally, and they are hiring many fewer people.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- All eyes on OER today; the most likely outcome is a significantly smaller increase than in January.
- Core services prices ex-rent likely rose much less quickly in February too, allowing the Fed to breathe.
- Small business sentiment usually rises when stocks do well; are credit conditions finally biting?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
The current trend in payrolls is steady, but a clear downturn is coming
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- 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
- Falling hiring plans and rising layoff fears signal a substantial slowdown in spring payroll growth.
- Cyclical job growth is likely to grind to a halt, or worse, leaving only demographics boosting employment.
- ISM manufacturing still stuck in a depressed range, but a modest spring revival is still a decent bet.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Nothing new from Chair Powell; the Fed will ease once they’re happy inflation will keep falling.
- Ignore ADP and the JOLTS job openings numbers; the further dip in the quits rate is all that matters.
- Initial jobless claims were likely flat last week, but leading indicators point to an upturn ahead.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Chair Powell will stick to the Fed’s core message; they are waiting for more good inflation data.
- Ignore ADP and the JOLTS job openings numbers; the quits rate is all that matters.
- February’s ISM services report points to lower inflation, and a softening labour market and activity...
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The ISM services index likely fell in February, but the headline is a poor guide to growth in activity.
- The prices paid index surged in January, leading to fears about a renewed rise in services inflation...
- ...But it is a volatile measure which often misleads; more reliable indicators point to lower inflation.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- 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
Backup in rates and high snow cover hurt sales last month
Ian Shepherdson (Chief Economist, Chairman and Founder)US
One spike in the core deflator after three very small increases does not change the trend.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- January’s jump in the core PCE deflator is noise, not signal; fundamental disinflationary forces are strong.
- February likely saw the third straight uptick in the ISM manufacturing index, but it remains depressed.
- Auto sales likely rebounded only partially last month after their January slump, and the trend is falling.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
