Consistent with slowing consumption growth and a gently rising unemployment rate.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- We look for a small dip in initial claims to 235K, due to Juneteenth, but the trend still is rising.
- May’s durable goods orders likely will point to a big drag on Q2 GDP growth from equipment investment.
- Net trade also looks set to weight heavily on Q2 growth, even if the goods trade deficit narrowed slightly in May.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The latest services surveys point to lower underlying inflation and a further slowdown in wage growth.
- New home sales probably dipped in May, reflecting the rise in mortgage rates since the start of the year.
- Conference Board confidence data signal slower spending growth and rising unemployment.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Shipping costs have rocketed, but they likely will add less than 0.1pp to core PCE inflation next year.
- The spike in shipping costs probably will unwind after tariff-related risks have abated.
- Consumer confidence likely dropped in June, with adverse implications for consumption growth.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
New mortgage rates still far too high for transactions to recover
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Falling hirings and rising firings are a toxic combination; job growth looks set to slow sharply.
- May building permits suggest residential construction spending is falling at a 10% annualized pace.
- Existing home sales likely were unchanged in May; Fed rate cuts will facilitate only a sluggish recovery.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Rent rises for new tenants have slowed sharply; the feared catch-up in CPI rent inflation is unlikely.
- We expect annualized CPI housing inflation to slow to 3-to-4% over the next few quarters.
- Q2 consumption is on course for a modest 2%, similar to Q1, after May's lacklustre retail sales data.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Inflation pressures reassuringly absent, given the surge in shipping costs.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Our Homebase model points to a mere 125K rise in private payrolls in June, the least since October.
- Retail sales likely recovered in May from a subpar April, but the trend looks less robust.
- Industrial production likely picked up in May; surveys have nudged up and hours worked have risen.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
May core PCE likely rose just 0.11%, well below the Fed’s expectations.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
May core PCE likely rose just 0.11%, well below the Fed’s expectations.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The CPI and PPI data imply that the core PCE deflator rose by just 0.11% in May…
- …Below the 0.19% average run rate forecast by the Fed; September’s SEP update will support a rate cut.
- The Michigan sentiment index probably bounced this month, but job loss worries seem to be mounting.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Disinflation is back on track; expect two easings in today’s 2024 dot plot.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The Fed’s hawkish dotplot is likely to have a short shelf life; the data will force faster easing than they expect.
- The May core CPI slowdown was deep-rooted; we expect just 0.20% average gains through year-end.
- CPI data signal a 0.16% rise in the core PCE deflator, but we will finalize our estimate after today’s PPI.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The high core PCE prints in Q1 will force the Fed to revise up its Q4 forecast, and cut one easing.
- A jump in used car and vehicle insurance prices probably drove a 0.3% increase in the May core CPI...
- ...But core services CPI inflation likely slowed further, indicating monetary policy is tight enough.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The NY Fed survey shows wage growth and long-run inflation expectations are in line with the 2010s.
- People plan to spend 5% more over the next year, but expectations correlate poorly with actual spending.
- Tight credit conditions are weighing heavily on small firms, an ominous sign for the economy at large.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The Homebase data were revised as we expected, so we are sticking with our 180K May payroll forecast.
- Rising jobless claims and the NFIB’s very weak hiring intentions index signal soft summer payrolls.
- We look for a 0.3% rise in average hourly earnings; a calendar quirk points to slight upside risk.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
ADP is too unreliable to take seriously, though it’s consistent with our payroll forecast.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
