- February’s subdued core PCE price data support the idea that January’s spike was a one-time fluke.
- Consumption is on track for a 2% gain in Q1, down from 3.3% in Q4, and real income growth is slowing
- A modest uptick in ISM manufacturing is a decent bet, but the sector remains weak.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The March Philly Fed and S&P surveys suggest the manufacturing sector’s downturn is over...
- ...But ongoing inventory rundowns and depressed global demand point to only modest growth ahead.
- New home sales likely rose for a third straight month in February; homebuilders will hang on to market share.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Manufacturers are past the worst, but claims will rise this spring.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- 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 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 clear slowdown in spring payroll growth.
- Cyclical job growth appears likely to grind to a halt, leaving only demographics boosting employment.
- The ISM remains depressed and range-bound, but it is likely to break gradually to the upside in the spring.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Backup in rates and high snow cover hurt sales last month
Ian Shepherdson (Chief Economist, Chairman and Founder)US
One spike in the core deflator after three very small increases does not change the trend.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The AI boom is visible everywhere except in the GDP numbers, but that is about to change.
- AI spending is more likely to displace spending on opex—people—than other capex.
- New home sales likely were little changed in January, but a weather hit can’t be ruled out.
Ian Shepherdson (Chief Economist, Chairman and Founder)US