- 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
The signs still point to weaker services inflation
Oliver Allen (Senior US Economist)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
Disappointing but better times probably lie ahead
Oliver Allen (Senior US Economist)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
A further rise in claims lies ahead
Oliver Allen (Senior US Economist)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
- OER redux: The unexpected January spike likely—but not definitely—will persist for five more months.
- Pending home sales likely dropped in January as favorable weather effects from December reversed.
- The Chicago PMI likely rebounded this month, but single regional surveys are unreliable.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Our core PCE forecast for January is below the consensus, but only just, and this is not an exact science.
- January headline durable goods orders will be depressed by Boeing, did snow hit the core?
- Consumers’ confidence likely rose again this month, but spending growth nonetheless is set to slow.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The AI boom is visible everywhere except in the GDP numbers, but that is about to change.
- AI spending is more likely to displace spending on opex—people—than other capex.
- New home sales likely were little changed in January, but a weather hit can’t be ruled out.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
