- Job gains are no longer “strong”; Powell might signal rates will be cut swiftly if the slowdown continues.
- Consumers are increasingly worried about losing their jobs, and for good reason.
- NFIB survey likely to suggest that small businesses remain under pressure from high rates.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Weakening in private payroll growth points to multiple rate cuts in H2.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Private payroll growth slowed sharply in Q2; revisions could easily worsen the picture.
- Tight monetary policy is the primary cause; employment growth will slow further in Q3.
- Wage growth now is consistent with the 2% inflation target; the Fed will ease multiple times in H2.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- We’re sticking with our forecast that payrolls rose by 160K in June, below the 190K consensus.
- The unemployment rate likely was unchanged at 4.0%, but large sampling error creates uncertainty.
- Neither the ISM or S&P services PMI is clearly better than the other; the truth likely lies between the two.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Ugly activity and employment numbers, further signs of disinflation.
Oliver Allen (Senior US Economist)US
Layoffs still trending higher, but the data will be noisy over the coming weeks.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Chair Powell sounds more optimistic on inflation, but wants to see no further rise in unemployment.
- We expect initial claims above the consensus for the fifth time in six weeks; summer data will be volatile.
- The June ISM services survey will probably provide further signs of disinflation ahead.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Revisions to Homebase data and the latest business surveys support our 125K private payrolls forecast.
- High rates are increasingly subduing construction; private fixed investment likely was unchanged in Q2.
- Manufacturing continues to struggle, with little sign of that changing anytime soon.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Still stagnating, no recovery in sight.
Oliver Allen (Senior US Economist)US
PMI's June surge tells us nothing about the national picture.
Oliver Allen (Senior US Economist)US
The economy’s main engine of growth is looking a lot weaker.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Real consumption set for another 1.5% increase in Q2; a rising saving rate will slow growth further soon.
- The 0.08% core PCE print was driven by noisy components, but underlying services inflation eased too.
- We look for another sub-50 ISM manufacturing index in June; tight monetary policy is preventing a revival.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Home sales on course to fall back in Q2.
Oliver Allen (Senior US Economist)US
Net trade and equipment investment both set to drag on Q2 growth.
Oliver Allen (Senior US Economist)US
Probably depressed marginally by Juneteenth; the trend remains upwards.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
New home sales likely to remain subdued.
Oliver Allen (Senior US Economist)US
- We’re are lowering our Q2 GDP forecast to 1.0%, from 1.5%, due to May’s poor trade and orders data.
- We estimate that the core PCE deflator rose by just 0.11% in May; a run of sluggish increases beckons.
- Real consumption likely rose by 0.3% in May, with growth of less than 2% looking likely for this quarter.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
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 SLOWDOWN IS REAL, AND WILL PERSIST…
- …THE FED IS RUNNING THE RISK OF DELAYING TOO LONG
Ian Shepherdson (Chief Economist, Chairman and Founder)US
