Plunge in headline index startling but not definitive.
Kieran Clancy (U.S. Economist)U.S.
Few reasons to be bullish about manufacturing
Kieran Clancy (U.S. Economist)U.S.
Survey data point to weaker growth but also lower inflation.
Kieran Clancy (U.S. Economist)U.S.
- Strong retail sales suggest the consumer will drive fourth quarter GDP growth...
- ...Even as the non-auto manufacturing sector sinks into a mild recession.
- Housing construction is falling fast, but it still has a long way to go, even if demand bottoms soon.
Ian Shepherdson (Chief Economist and Founder)U.S.
Manufacturing is hanging in; labor demand is softening, gradually.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The plunge in job openings was the biggest surprise in the August data; what happened in September?
- The ISM manufacturing index likely fell again in October, but it remains well above recession levels.
- Auto sales appear to have rebounded very strongly in October as supply continued to improve.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Recessions are proportional to the prior imbalances, and right now the private sector is in good shape…
- …A brief over-reaction to the extent of the Fed’s tightening is possible; a deep recession is unlikely.
- Hints of a pivot played well in markets last week, but the Fed needs better data, soon.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Manufacturing is struggling, but autos will flatter the production numbers as supply chains ease further.
- Capex plans in the Empire State survey have risen for three straight months, but other surveys are weaker.
- No end in sight for homebuilders’ misery; the latest surge in mortgage rates is yet to work through.
Ian Shepherdson (Chief Economist and Founder)U.S.
Disappointing, but clear signals of downward pressure on inflation
Ian Shepherdson (Chief Economist and Founder)U.S.
- Businesses’ capex plans appear to be starting to rebound, but how much damage has been done?
- Cheaper gas likely is cheering consumers, and reducing their inflation expectations.
- New home sales probably fell again in August, and prices probably are falling, given very high inventory.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Huge uncertainty over foreign trade and inventories mean Q3 GDP growth is still a wild card.
- We see substantial net upside risk, but other models point in the opposite direction.
- Homebuilders’ sentiment likely has not yet bottomed; mortgage demand is still falling.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Core PPI inflation is falling fast, despite upward pressure from a technical issue in August.
- Core retail sales likely rose at a decent pace in August, though the margin of error is bigger than usual.
- A calendar quirk probably will constrain reported manufacturing output in August.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The Fed finally has started to talk about the impact of margins on inflation, after months of baffling silence.
- Vice-Chair Brainard says wider margins drove up inflation; a reversal could drive it back down.
- Jobless claims hit a three-month low; the feared summer surge in layoffs did not happen.
Ian Shepherdson (Chief Economist and Founder)U.S.
The downshift is over, and price pressures are easing
Ian Shepherdson (Chief Economist and Founder)U.S.
- The Homebase data point to another solid payroll gain, but the August seasonal is a wild card.
- Wage growth appears to be picking up slightly, but we need more data to be sure.
- The ISM has stabilized, and the supply-chain measures point to much lower inflation.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Rising vehicle production will feed through into higher sales, but August looks to have been too soon.
- The manufacturing sector likely slowed again in August, but it is not rolling over.
- ADP’s new payroll methodology is an improvement, but the errors are still large and volatile.
Ian Shepherdson (Chief Economist and Founder)U.S.
Business lending standards are tightening, but credit growth is still strong, for now.
Plunging new home sales are dragging down prices, and hurting service sector activity surveys.
Upside risk for July durable goods orders today, but the housing collapse is worsening by the month.
Ian Shepherdson (Chief Economist and Founder)U.S.
The Homebase data suggest August payrolls were about as strong as July's.
Core retail sales likely rose quite strongly in July; the headline will be depressed by falling gas prices.
Soaring vehicle production is flattering industrial pro- duction, but it will boost GDP and depress inflation.
Ian Shepherdson (Chief Economist and Founder)U.S.
The current pace of unit labor costs growth, if sustained, is incompatible with the inflation target…
…But wage growth will slow next year, and productivity growth will rebound.
More immediately, disinflation over the next year will be driven by margin re-compression.
Ian Shepherdson (Chief Economist and Founder)U.S.
Payroll growth looks to have slowed to about 250K in July, continuing the slowing trend.
The Q2 employment costs index should show that wage growth has softened markedly.
GDP growth likely will rebound in Q3, but final demand will be weak; that matters more to the Fed.
Ian Shepherdson (Chief Economist and Founder)U.S.
