- The surge in inflation is largely a margin story; costs have jumped too, but margins are the bigger factor.
- Absent structural change in markets, margins will mean-revert, pulling inflation down, but how quickly?
- The Empire State survey looks primed for a correction after the inexplicably strong April reading.
Ian Shepherdson (Chief Economist and Founder)U.S.
- A big drag from inventories means we have pulled down our Q1 GDP forecast to zero…
- …Growth likely will rebound strongly in the second quarter, because final demand looks solid.
- Chainstore sales growth is slowing rapidly, but mostly—perhaps entirely—due to adverse base effects.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Productivity growth rebounded in Q4, but the more important point is that the outlook is very bright...
- ...Stronger productivity growth over the medium-term would boost real incomes and corporate earnings.
- The Omicron hit means downside risk to today's ISM services index; expect better in February.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The ISM index likely dipped in January, but a big Omicron hit seems to have been averted.
- The construction recovery has been driven entirely by housing, but the story is changing…
- …Industrial and commercial construction is rebounding strongly, but housing activity is set to drop.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The preliminary Homebase data for December signal falling payrolls, even allowing for upward revisions.
- The Philly Fed index likely will follow the plunge in the Empire State, hit by the Omicron wave.
- Jobless claims likely rose for a third straight week, thanks to the seasonals, which will soon reverse.
Ian Shepherdson (Chief Economist and Founder)U.S.
- December's grim retail sales report likely will be fol- lowed by further weakness in January...
- Spending has been hit, temporarily, by a one-two punch from early holiday shopping, then Omicron.
- The Fed is dead set on starting to tighten soon, but the upcoming data should dampen Q2 expectations.
Ian Shepherdson (Chief Economist and Founder)U.S.
The U.K.'s exponential leap in Covid cases and plunge in services activity is coming to the U.S., soon.
We hope the Omicron wave will be brief, but it is cer- tain to be severe, at least in terms of cases.
The robust industrial recovery continues, with every chance of further increases in output in Q1.
Ian Shepherdson (Chief Economist and Founder)U.S.
The Fed's tapering and rate hike plans assume only a modest hit from Omicron; we hope they're right.
Chair Powell emphasised the threat from rapid wage gains; all eyes on labor participation, and the Q4 ECI.
The abrupt slowing in core retail sales in November is no big deal; a correction was due after rapid gains.
Ian Shepherdson (Chief Economist and Founder)U.S.
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In one line: Soft core sales, manufacturing still strong
Ian Shepherdson (Chief Economist and Founder)U.S.
The Fed will announce faster tapering today, opening the door to a rate hike in the spring.
The dotplot likely will show two rate hikes in 2022, triggered by the run of upside inflation surprises.
Core retail sales likely undershot consensus in November, but the trend is still strong.
Ian Shepherdson (Chief Economist and Founder)U.S.
Core PPI inflation has further to rise, but it should start to fall in January.
The details of the NFIB survey are more important than the headline index...
...Look out for strength in capex plans, and a modest rise in selling prices, lifted by gas prices.
Ian Shepherdson (Chief Economist and Founder)U.S.
- ADP's November employment number likely will be boosted by the fading drag from the Delta variant.
- Chair Powell has retired "transitory", and kicked open the door to faster tapering, Omicron permitting.
- The November ISM likely will signal a modest easing in supply pressures; auto sales up again?
Ian Shepherdson (Chief Economist and Founder)U.S.
- Chair Powell's re-appointment and the impending new board appointments will keep the Fed dovish...
- ...But an immediate acceleration of the tapering pace in December can't be ruled out.
- Home prices continue to rocket as rising sales leave no room for inventory to recover.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Used vehicle auction prices are still rising, but the rate of increase has slowed; is the worst over?
- A year from now, and possibly much sooner, we ex- pect car prices to be in free-fall.
- Surging Philly Fed and Empire State surveys suggest that the strong manufacturing rebound continues.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The initial Homebase jobs data for the November payroll survey week look disconcertingly soft...
- ...But the data always are revised up, and the revisions are consistent; we look for 800K private jobs.
- October retail sales and industrial production num- bers today likely will confirm a solid start to Q4.
Ian Shepherdson (Chief Economist and Founder)U.S.
- In one line: Demand still strong; supply chain pressures peaking?
Ian Shepherdson (Chief Economist and Founder)U.S.
- The recent pace of decline in initial jobless claims can't be sustained, but they should keep falling.
- As the economy re-accelerates post-Delta, labor de- mand will rise and layoffs will hit new lows.
- Home sales likely rose strongly in September, but the impact of Hurricane Ida is a wild card.
Ian Shepherdson (Chief Economist and Founder)U.S.