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.
- November private payrolls look to have risen by about 250K, little changed from October.
- Surging auto sales and higher gas prices likely boosted October retail sales.
- The Great Margin Recompression is underway, but it has a long, long way to go.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Control of the Senate might not be decided until December; it’s unlikely to be known tonight.
- The drop in household employment in October was noise, not a sign of plunging payrolls ahead.
- Small business sentiment under renewed pressure from falling stock prices and higher rates.
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.
- The initial Homebase data for the October survey week point to much weaker payroll growth.
- Hurricane Ian likely accounts for some of the slowing, but most of it looks to be real.
- Housing construction as falling; it has a long way to go, given the ongoing plunge in home sales.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The Homebase employment data suggest Septem- ber payrolls rose by about 300K.
- The unwinding of August’s calendar quirk signals upside risk for average hourly earnings.
- Job growth is strong enough to push unemployment down, but it is being offset by rising participation.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Aggressive rate hikes will continue until inflation improves; 75bp in November, but 25bp in December?
- Fed opinion is split, even in the near-term, and the inflation data over the next few months will be better.
- The Homebase data suggest a preliminary 325K forecast for September payrolls.
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.
- Our 2023 base case is that inflation will surprise to the downside, but growth will surprise to the upside…
- …Under those conditions, the Fed will not be easing next year; continued gradual hikes are more likely.
- Rising r-star in the face of sustained economic growth is nothing for real assets to fear
Ian Shepherdson (Chief Economist and Founder)U.S.
- Consumers’ discretionary spending is reviving in the wake of the plunge in gas prices.
- The ISM and PMI services indexes are headed in opposite directions; one of them is wrong.
- The July trade data will confirm that the deficit is falling fast; trade will be a big plus for Q3 GDP growth.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Job growth likely is slowing, but it is still too strong for the Fed, and wage gains are too fast too...
- Participation appears still to be rising, but it’s not yet high enough to cap wage growth.
- The services PMI points to downside risk for ISM services; housing is hurting both surveys.
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.
- The ADP employment report returns today, with new methodology; forecasts are, therefore, a joke.
- The number of JOLTS job openings remains close to the peak, but are the data believable?
- Consumer confidence is rebounding as falling gas prices boost people’s spending power.
Ian Shepherdson (Chief Economist and Founder)U.S.
