- The preliminary Homebase data for December signal falling payrolls, even allowing for upward revisions.
- The Philly Fed index likely will follow the plunge in the Empire State, hit by the Omicron wave.
- Jobless claims likely rose for a third straight week, thanks to the seasonals, which will soon reverse.
Ian Shepherdson (Chief Economist and Founder)U.S.
- December's grim retail sales report likely will be fol- lowed by further weakness in January...
- Spending has been hit, temporarily, by a one-two punch from early holiday shopping, then Omicron.
- The Fed is dead set on starting to tighten soon, but the upcoming data should dampen Q2 expectations.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The Omicron hit likely will be visible in the retail sales data, but the core goods numbers should be OK.
- Industrial production probably was depressed by very warm December weather; expect a quick rebound.
- Car prices are beginning to moderate in the PPI, both at the manufacturer and dealer margin levels.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Upside risk to the December core CPI, mostly from vehicle prices, airline fares, and hotel room rates.
- Headline inflation likely rose above 7%, but this should be the peak.
- Small firms sentiment is yet to reflect the Omicron hit, or the weakening in the stock market.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Covid cases look to be peaking, but ICU occupancy looks set for new pandemic highs.
- The situation will look much better a month from now, as cases drop and Paxlovid cuts hospitalizations.
- As Covid finally recedes, people will start to spend their accumulated savings.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The relative softness in December payrolls is hard to explain, but the labor market is still tightening.
- Sub-4% unemployment is enough to convince most FOMC members than an early rate hike is needed.
- We expect the first hike in March, with an increasing chance of three further hikes this year.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The risk to December payrolls is decidedly to the up- side; we look for 850K, against the 444K consensus.
- A further rise in participation would be hugely significant, signalling an easing of excess labor demand.
- The ISM services survey suggests that supply-chain pressures are easing, but they remain intense.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Our final December jobs forecast is 850K; we expect the initial print to be revised up up to about 1M.
- Forecasting payrolls during Covid is a nightmare, but the risk to the 424K December consensus is clear.
- We now expect the first Fed hike in March, with two further hikes later in the year, and a steeper curve.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The Homebase small business jobs data point to December payrolls rising by 1M-plus...
- ADP's numbers today likely will be far short of this pace, but we see upside risk to the consensus.
- Supply chain pressures continue to ease; expect the key ISM readings to be at normal levels by the spring.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Covid cases still rocketing, but they likely will peak over the next couple weeks.
- The economic hit will be smaller and briefer than during the Delta wave, but it will be visible nonetheless.
- The December ISM survey likely will show that supply-chain pressures are easing, gradually
Ian Shepherdson (Chief Economist and Founder)U.S.
- Core PCE probably hit a 32-year high in November, but it has further to rise before peaking in February.
- Core capital goods orders are rising, but higher inflation is eating into the gains in real terms.
- Upside risk for November new home sales, given the sustained surge in mortgage applications.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Homebase data for December point to a a surge in payrolls; they were right about the soft November.
- Omicron is a serious threat to job growth early in the New Year; spending on services will drop for a time.
- Real-time data aren't rolling over yet, but European experience sends a very clear warning.
Ian Shepherdson (Chief Economist and Founder)U.S.
The U.K.'s exponential leap in Covid cases and plunge in services activity is coming to the U.S., soon.
We hope the Omicron wave will be brief, but it is cer- tain to be severe, at least in terms of cases.
The robust industrial recovery continues, with every chance of further increases in output in Q1.
Ian Shepherdson (Chief Economist and Founder)U.S.
The Fed's tapering and rate hike plans assume only a modest hit from Omicron; we hope they're right.
Chair Powell emphasised the threat from rapid wage gains; all eyes on labor participation, and the Q4 ECI.
The abrupt slowing in core retail sales in November is no big deal; a correction was due after rapid gains.
Ian Shepherdson (Chief Economist and Founder)U.S.
The Fed will announce faster tapering today, opening the door to a rate hike in the spring.
The dotplot likely will show two rate hikes in 2022, triggered by the run of upside inflation surprises.
Core retail sales likely undershot consensus in November, but the trend is still strong.
Ian Shepherdson (Chief Economist and Founder)U.S.
Core PPI inflation has further to rise, but it should start to fall in January.
The details of the NFIB survey are more important than the headline index...
...Look out for strength in capex plans, and a modest rise in selling prices, lifted by gas prices.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Job growth has strengthened from the summer lows, but seems not yet to be back to the pre-Delta pace.
- Participation is the key variable for the Fed; it has to rise, soon, in order to constrain wage gains.
- Hourly earnings growth in November likely was limit- ed by a calendar quirk; expect stronger in December.
Ian Shepherdson (Chief Economist and Founder)U.S.
- We now look for a 550K headline payroll print tomor- row, in the wake of the disappointing ADP report.
- The ISM manufacturing survey confirms that supply-chain pressures are easing, albeit slowly.
- Jobless claims likely rebounded strongly in Thanks- giving week as a huge seasonal quirk reversed.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The Fed wants to reach maximum employment be- fore raising rates; it's still a long way off...
- ...Fully recovering the ground lost during Covid likely will take almost a year.
- The November Philly Fed likely will add to evidence suggesting peak supply chain pressure has passed.
Ian Shepherdson (Chief Economist and Founder)U.S.
