A slump in manufacturing activity and surge in goods inflation lies ahead.
Oliver Allen (Senior US Economist)US
STAGNATION AHEAD, AS THE TARIFFS HIT REAL INCOMES…
- …THE FED WILL EASE MATERIALLY, DESPITE RISING INFLATION
Oliver Allen (Senior US Economist)US
- Manufacturing output likely jumped by 0.5% in March, returning to its highest level since late 2022…
- …Don’t be deceived; a manufacturing recession is likely in the coming months on the back of tariffs.
- Supply chains look set for disruption, and consumer, industrial and export demand will all soften.
Oliver Allen (Senior US Economist)US
- Pre-tariff purchases of auto and other durable goods imply a strong headline retail sales number...
- ...But real spending on goods looks set to slump over the next few quarters.
- Tariff exemptions for tech leave the gloomy big picture for the broader economy little changed.
Oliver Allen (Senior US Economist)US
A much bigger rise in claims lies ahead.
Oliver Allen (Senior US Economist)US
Confidence crumbling even before "Liberation Day".
Oliver Allen (Senior US Economist)US
ADP distracts more than it informs.
Oliver Allen (Senior US Economist)US
Tariff uncertainty is weighing on manufacturing.
Oliver Allen (Senior US Economist)Global
Tariff uncertainty is weighing on manufacturing.
Oliver Allen (Senior US Economist)US
- Headline payrolls likely rose about 140K in March, with private payrolls up by roughly 125K.
- Ignore the upbeat NFIB survey; Conference Board, Indeed and regional Fed data point to a slowdown.
- Continuing claims data point to a stable unemployment rate, but WARN filings point to a rise ahead.
Oliver Allen (Senior US Economist)US
Sales likely to remain in the doldrums.
Oliver Allen (Senior US Economist)US
Gold trade and pre-tariff stockpiling are distorting the numbers.
Oliver Allen (Senior US Economist)US
Equipment investment likely to remain anemic at best.
Oliver Allen (Senior US Economist)US
- Today’s PCE report likely will show a rebound in real consumption and a 0.4% rise in the core deflator.
- Threatened auto tariffs would likely raise the core price level by 0.2-to-0.4percentage points.
- Soaring gold imports imply a much smaller drag on Q1 GDP from net trade than headline data suggest.
Oliver Allen (Senior US Economist)US
- Regional Fed surveys suggest that services sector activity, hiring and investment is slowing sharply.
- The message on inflation is mixed, but firms expect their pricing power to wane.
- February’s orders report provides further signs the recovery in equipment investment is already fading.
Oliver Allen (Senior US Economist)US
- The consumer surveys have deteriorated sharply, but probably overstate the incoming slowdown.
- Air passenger numbers are 4% below their peak, matching the drawdown before the 2001 recession...
- ...But similar declines also were seen in 2005 and 2006, without recession immediately ensuing.
Oliver Allen (Senior US Economist)US
Providing some reassurance on service sector activity.
Oliver Allen (Senior US Economist)US
Manufacturing recovery already showing signs of fading.
Oliver Allen (Senior US Economist)US
