- A third straight benign core CPI print for December would complete the best streak in two years.
- Look out for falling vehicle prices and airline fares, and—perhaps—slower rent increases.
- Jobless claims likely stayed low last week, but rising layoff announcement signal trouble ahead.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Our base case remains that inflation will be van- quished without a recession...
- ...But the Fed’s determination to take zero inflation risk makes the balancing act much more difficult.
- Core inflation is now falling, but the Fed wants wage growth to moderate; leading indicators are favorable.
Ian Shepherdson (Chief Economist and Founder)U.S.
The Homebase small business employment data point to a 250K increase in October payrolls...
...But whatever happened in October, job growth will slow markedly over the next few months.
A fourth straight modest hourly earnings number would strongly suggest the trend is slowing.
Ian Shepherdson (Chief Economist and Founder)U.S.
ADP’s employment measure is unreliable; we will be sticking to our 250K payroll forecast.
Job openings are trending downwards but not collapsing; wage growth is slowing more quickly.
The October trade deficit likely fell slightly, but the big correction in imports is over.
Ian Shepherdson (Chief Economist and Founder)U.S.
Chain store sales growth is slowing; adverse base effects are only part of the story...
...Discount stores appear to be suffering as low- income households are squeezed.
Home prices are falling, probably at an accelerating rate, and consumers are glum.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Layoff announcements are not a reliable guide to jobless claims in the short term...
- ...But we cannot ignore the upward trend in recent months; claims likely will follow.
- Regional Fed surveys point to a sharp slowdown in capital spending, but it is not in the hard data yet.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Forecasts of GDP growth over 4% in Q4 might be right, but at this point they are premature.
- Existing home sales likely fell again in October but can’t drop much further; prices can.
- Used vehicle auction prices nudged up in early November; we hope it’s noise, not signal.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Job growth is slowing, on track to slip below 100K by next March, pushing up unemployment.
- Wage growth appears to be softening, though the data are not quite definitive, yet.
- If recent trends continue, and core CPI prints moder- ate, Chair Powell’s stance will have to change.
Ian Shepherdson (Chief Economist and Founder)U.S.
- We look for a 175K increase in October payrolls, but the margin of error is large at inflexion points...
- ...Employment measures in most business surveys have weakened, but they remain quite strong.
- Look out for a third straight soft hourly earnings print; that would start to look like a trend.
Ian Shepherdson (Chief Economist and Founder)U.S.
- If core inflation and wage growth slow simultaneously, the Fed’s last hike will be in December
- Don’t be deceived by low and stable initial claims; labor demand is slowing markedly.
- The latest core CPI prints are grim, but recency bias is dangerous; change is coming, for the better
Ian Shepherdson (Chief Economist and Founder)U.S.
