Pantheon Macroeconomics

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U.S. Publications

Below is a list of our U.S. Publications for the last 6 months. If you are looking for reports older than 6 months please email info@pantheonmacro.com, or contact your account rep

Please use the filters on the right to search for a specific date or topic.

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1 July 2022 Q2 Set for the Second Straight Dip in GDP, but it's not a Recession

Downward revisions to prior data and soft May consumption signal a real risk of a small dip in Q2 GDP…

…Not every fall in GDP signals recession, especially when payrolls are still rising rapidly.

The June ISM manufacturing index likely fell, but by much less than the Caixin PMI seems to imply.

Ian Shepherdson (Chief Economist and Founder)U.S.

28 June 2022 Q2 Rebound in Foreign Trade Likely to be Smaller than we Hoped

The first quarter’s massive surge in the trade deficit won’t be repeated in the second quarter…

…But the correction will be smaller than we hoped, so the 3.2pp hit to Q1 GDP will only partly reverse.

Consumer confidence likely fell sharply this month, responding to gas prices and the stock market drop.

Ian Shepherdson (Chief Economist and Founder)U.S.

21 June 2022 How the Fed can Thread the Needle, Reducing Inflation with no Recession

A central bank which promises to hike until inflation falls usually would be signalling recession…

But the margin compression, slowing wage gains, and big cash balances make this time different…

…The Fed has a decent chance of avoiding recession and bringing inflation down quickly.

Ian Shepherdson (Chief Economist and Founder)U.S.

15 June 2022 The Fed Sledgehammer is Coming, but it is Unnecessary and Risky

The Fed is set to hike by 75bp, just as it becomes clear that inflation pressure is beginning to ease. 

More aggressive hikes raise the risk of an unnecessary—though likely brief—recession. 

Headline May retail sales will be hit by the auto component, but that’s a supply issue; demand is strong. 

Ian Shepherdson (Chief Economist and Founder)U.S.

14 June 2022 Margin Re-Compression is Key to Lower Inflation, Progress in the PPI

Margin re-compression, on the back of the inventory rebuild, is the key to falling inflation over the next year.

PPI "trade services" measures margins directly; they dipped in April and likely fell again in May.

Downside risk to the NFIB headline index today, but we already know that hiring plans rebounded.

Ian Shepherdson (Chief Economist and Founder)U.S.

13 June 2022 No Relief as Energy, Food, Cars, and Rent Hide Better Core-Core CPI

The downturn in core inflation is set to stall over the summer, while the headline rate will hit new highs…

…But core-core prices are now rising less quickly, thanks to slowing wage gains.

The Fed will hike by 50bp this week and in July, markets permitting, but we expect 25bp in September.

Ian Shepherdson (Chief Economist and Founder)U.S.

3 June 2022 Payroll Growth Appears to have Slowed, but it Remains Strong

The Homebase data and an array of surveys suggest that job growth has slowed; we look for 250K.

The softening in average hourly earnings growth looks real, given the surge in prime-age participation.

Google mobility data point to a clear rebound in the ISM services index, but that guarantees nothing.

Ian Shepherdson (Chief Economist and Founder)U.S.

2 June 2022 Recent Data are Mixed, but No Sign of the Feared Rollover

The drop in May auto sales is a blip; the recovery in production will support rising sales through year-end.

The uptick in the ISM manufacturing index can’t be sustained, but overall the sector is in decent shape.

Don’t bother with the ADP employment report today; it is an unreliable guide to payrolls.

Ian Shepherdson (Chief Economist and Founder)U.S.

31 May 2022 Four Reasons to Expect Core Inflation to Plunge Over the Next Year

We think markets and the Fed are too cautious on the question of how quickly core inflation will fall...

Slower wage gains, margin compression, housing weakness and the strong dollar will depress inflation.

The Fed has to keep hiking, but it can pivot to 25bp in July, and the inflation panic narrative will soon fade.

Ian Shepherdson (Chief Economist and Founder)U.S.

18 May 2022 Consumption off to a Flying Start in Q1, Despite the Inflation Shock

The strong retail sales numbers for April suggest second quarter consumption is on track for 5% or so.

People appear to be drawing down some of their pandemic savings, but trillions remain.

The housing market is now clearly rolling over; even the homebuilders are acknowledging the hit.

Ian Shepherdson (Chief Economist and Founder)U.S.

16 May 2022 Mean-Reversion in Margins will Drive Inflation Down, Perhaps Quickly

  • 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.

10 May Don't Fret Over Falling Savings, People have Trillions in Excess Cash

 The falling saving rate has allowed people to spend more as real incomes have declined...

...Usually, that would be unsustainable, but house- holds have trillions of dollars of pandemic savings.

The NFIB index of small business sentiment likely fell again in April, but the details are more important.

Ian Shepherdson (Chief Economist and Founder)U.S.

4 May 2022 It's too Soon for Chair Powell to Sound Less Hawkish

The Fed will hike by 50bp today; it’s too soon for Chair Powell to sound less hawkish, despite falling stocks...

...But we’re keen to see how much emphasis he puts on the coming drop in inflation and housing activity.

Mobility data signal upside risk for ISM services, after Omicron; ADP due too, but it doesn’t matter at all.

Ian Shepherdson (Chief Economist and Founder)U.S.

3 May 2022 Manufacturing is Set to Slow, but it is an Unreliable Guide to GDP Growth

The manufacturing sector is feeling the weight of China’s slowdown; the ISM is set to fall further.

Manufacturing is not GDP, but—like housing—it is has an outsized impact on perceptions of the economy.

The number of job openings has peaked, likely be- cause rapid hiring has reduced the Covid backlog.

Ian Shepherdson (Chief Economist and Founder)U.S.

PM Datanote: U.S. Chicago PMI, April

Unexpectedly soft, but more volatile than the national ISM index

Ian Shepherdson (Chief Economist and Founder)U.S.

29 Apr 2022 Economic Growth will Rebound in Q2, the Fundamentals are Solid

The dip in first quarter GDP hides solid consumption and investment numbers; ignore the noise.

Growth likely will rebound strongly in the second quarter; 5% or better is a decent starting assumption.

A further moderation in ECI wage growth is a good bet for Q1, implying easing core-core inflation risk.

Ian Shepherdson (Chief Economist and Founder)U.S.

26 Apr 2022 New Home Sales are Heading South, but the Data are Volatile

The rapid, steady drop in mortgage applications signals falling new home sales for the foreseeable future.

Consumers’ confidence likely rebounded in April, as the gas price shock faded.

Seasonal quirks imply upside risk for core durable goods orders in March.

Ian Shepherdson (Chief Economist and Founder)U.S.

12 Apr 2022 Inflation Peak Arrives; the Downshift Could be Disorientingly Fast

Both headline and core inflation peaked in March; base effect alone will trigger a clear drop in Q2.

The risks to the March core consensus are mostly to the downside, thanks to falling used vehicle prices.

The NFIB index likely dropped again in March; it’s sensitive to the stock market and gas prices.

Ian Shepherdson (Chief Economist and Founder)U.S.

6 Apr 2022 FOMC Minutes Likely to Show Heightened Inflation Fears

The March minutes will show FOMC members are much more worried about inflation than in January.

Mortgage applications are falling rapidly in the face of higher rates; further sustained declines are coming.

The modest rebound in the March ISM services index will be followed by further gains.

Ian Shepherdson (Chief Economist and Founder)U.S.

5 Apr 2022 BA.2 is Pushing up Covid Cases, but Expect a Limited Economic Impact

The BA.2 variant is now pushing up Covid cases in the Northeast, and it will spread rapidly.

...But we are increasingly confident that the economic hit will be much smaller than during the Omicron wave.

ISM services set to rebound in the wake of the recovery in mobility; employent set to jump too?

Ian Shepherdson (Chief Economist and Founder)U.S.

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