- September's core CPI was flattered by unsustainable declines in airline fares, lodging and used car prices...
- ...But rents rose at the fastest pace in 15 years, so all eyes now will be on the October report.
- Stop Press: FOMC minutes confirm tapering to be announced at the November meeting.
Ian Shepherdson (Chief Economist and Founder)U.S.
- We expect a modest 0.2% increase in September's core CPI, but the net risk is to the upside.
- Used auto prices have rebounded at auction, and we're still waiting for rents to accelerate.
- The record quits rate in August signals that the Delta wave has not deterred job-switchers.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The plunge in new vehicle sales continues, but the incremental drop in Q4 will be smaller than in Q3.
- Inventory is rock-bottom, and new vehicle prices are soaring, but the rate of increase has to slow.
- New housing construction has peaked, for now, but a rebound in non-residential activity is set to start soon.
Ian Shepherdson (Chief Economist and Founder)U.S.
- China's manufacturing slowdown is not helpful to the U.S., but it is a long way from a hammer-blow.
- Consumers' spending likely rose a bit in August, but September won't be great; Q4 should be much better.
- The core PCE spike is over, but airline fares will lift the August reading relative to the core CPI.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Core capital goods orders are the best immediate proxy for business capex; strong growth continues.
- The rebound in mortgage applications and home sales continues after the H1 slump...
- Covid fear, lower rates, and easier lending standards are all helping to push up activity; more to come?
Ian Shepherdson (Chief Economist and Founder)U.S.
- Technicalities flatter August retail sales, but the upside surprise is real; an echo of earlier Covid-era patterns.
- States suffering most from the Delta wave have rela- tively low immunity, but the national wave is breaking.
- The risk of a serious further wave is fading as total immunity approaches Delta-suppressing levels.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Cross-currents in the core CPI suggest further volatility over the next few months…
- …But a repeat of the spring surge is unlikely, even as hotel room rates and airline fares rebound, post-Delta.
- The NFIB survey hints that small firms are responding to tight labor markets by increasing their capex
Ian Shepherdson (Chief Economist and Founder)U.S.
- The Covid Delta wave appears to have peaked; a steady decline in cases is a good bet.
- Most states now appear to have immunity rates above 70%; that's enough to limit future waves.
- The seasonals point to another drop in jobless claims today, but Delta is a wild card.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Delta dampened August job growth; September will be weak too, and October is at risk.
- The tapering announcement will be delayed; December now looks the best bet, but it could be later.
- Fed hawks will continue to emphasize faster wage growth; Chair Powell is focussed on unit labor costs
Ian Shepherdson (Chief Economist and Founder)U.S.
- Homebase and ADP both suggest Delta hurt August job gains; we look for a 400K payroll print tomorrow.
- The modest August gain in the ISM likely won't be sustained; supply-chain pressures have peaked.
- Mortgage applications have risen for two straight months; the revival likely will continue in September
Ian Shepherdson (Chief Economist and Founder)U.S.
- The unwinding of the Q2 stimulus boost and the Delta hit mean that consumption looks set to fall in Q3…
- …But rising business capex and a potentially massive rebound in inventories will support growth.
- Powell's defense of "transitory" and push for full employment means no taper until data are clearer.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Delta waves are brutal but relatively short; U.S. daily Covid cases should peak by the end of August.
- The interruption to the economic recovery should not last beyond September; behavior will lag the data.
- Home price gains are slowing sharply as inventory rises and demand returns to pre-Covid levels.
Ian Shepherdson (Chief Economist and Founder)U.S.
- FOMC splits and the Delta wave suggest the tapering announcement will be no sooner than November.
- The trend in jobless claims seems still to be falling, as the run of seasonally-distorted numbers ends.
- Downside risk for the Philly Fed today; the global manufacturing recovery is moderating.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Thailand's economy defied gravity in Q2, but trade is unlikely to provide much of a boost—if any—in Q3.
- The Delta squeeze on consumption will persist, but a collapse is unlikely and capex should stay afloat.
- Don't read too much into the jump in remittances in the Philippines in June; the trend remains weak.
Ian Shepherdson (Chief Economist and Founder)U.S.
Another outsized increase in the ECI measure of wages would be awkward…
…But the Fed will argue that increased labor supply in the fall will prevent inflationary wage gains.
Q2 GDP growth was depressed by a wild swing in inventories; expect a rebound in Q3.
Ian Shepherdson (Chief Economist and Founder)U.S.
Chair Powell will stick to his lines today, and will add that the Fed is closely watching the march of Delta.
Most states appear to be short of the 85% immunity required to suppress the spread of Delta.
Home price gains are set to slow sharply, but rents are likely to accelerate in the second half.
Ian Shepherdson (Chief Economist and Founder)U.S.
Downside risk for headline June durable goods does not change the strong core picture.
Capital spending looks set to rise for some time yet, beginning to reverse the post-2008 disaster.
New home sales are now almost in line with mortgage demand, but price gains are set to slow very sharply
Ian Shepherdson (Chief Economist and Founder)U.S.
Some of the near-real-time data are flattening; don't worry, it had to happen, and some will re-accelerate.
The recovery is still on track, though we'll be much happier once clarity emerges in the labor market.
We see hefty downside risk to June new home sales; forecasts ignore the plunge in mortgage demand.
Ian Shepherdson (Chief Economist and Founder)U.S.
The Wall Street Journal ran a nonsensical editorial piece yesterday on the subject of inflation.
Ian Shepherdson (Chief Economist and Founder)U.S.
What should we make of the news that manufacturing production fell outright in June—just—but that the Empire State manufacturing index has rocketed to a record high?
Ian Shepherdson (Chief Economist and Founder)U.S.
