- The FOMC likely will stick to its December forecast of 75bp easing this year.
- FOMC members’ inflation forecasts probably will be little changed, despite recent data disappointment.
- Homebuilders are gaining market share, keeping single-family construction on an upward track.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Lower rates still supporting for homebuilders
Oliver Allen (Senior US Economist)US
- Homebase points to solid March job growth, but likely slower than in February…
- Either way, the outlook for the second quarter is materially weaker; hirings down, firings up.
- Housing construction is set to rise as homebuilders gain market share; is the multi-family slump over?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Still consistent with resilient growth in consumption, for now
Samuel TombsUS
- The shrinking stock of excess savings has exposed most households and small firms to the Fed’s hikes…
- Recent evidence of slowing growth is not yet definitive, but it has our attention.
- Nothing would shift market expectations of faster easing than a clear softening in payrolls; is it coming?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Disappointing enough to make a first easing in May much less likely
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Downward revisions and a muted February recovery signal an emerging consumer slowdown.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The January and February retail sales numbers signal a sharp slowdown in consumption in Q1.
- Core PPI inflation has flattened recently, but weaker consumption will drag down margins later this year.
- Expect a rebound in February manufacturing output, but it will mostly be a weather-related story.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- February retail sales likely rebounded after January’s weather hit, but look out for revisions
- Downside risk for February’s core PPI, but the data are much noisier than the CPI numbers.
- Jobless claims are still tracking sideways, but an array of indicators points to a clear increase in the spring.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- February’s core CPI was less bad than January’s, but unhelpful to the case for an early Fed rate cut.
- Nothing is yet definitive, given how much inflation and labor market data will appear before the May FOMC.
- Small firms are much less cheerful than implied by the stock rally, and they are hiring many fewer people.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- All eyes on OER today; the most likely outcome is a significantly smaller increase than in January.
- Core services prices ex-rent likely rose much less quickly in February too, allowing the Fed to breathe.
- Small business sentiment usually rises when stocks do well; are credit conditions finally biting?
Ian Shepherdson (Chief Economist, Chairman and Founder)US
The current trend in payrolls is steady, but a clear downturn is coming
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The steady trend in job growth is set to take a serious turn for the worse, perhaps as soon as March.
- Soft March payrolls and two rounds of good inflation data would allow the Fed to ease in May.
- Congress has done the easy half of 2024 spending; expect more drama as the going gets tougher.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Falling hiring plans and rising layoff fears signal a substantial slowdown in spring payroll growth.
- Cyclical job growth is likely to grind to a halt, or worse, leaving only demographics boosting employment.
- ISM manufacturing still stuck in a depressed range, but a modest spring revival is still a decent bet.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
