- Consumption is on track for another solid increase in Q1, but cashflow growth is slowing…
- Spending growth likely will moderate in the spring, but a serious weakening requires rising layoffs.
- Core inflation is slowing on all fronts; faster margin compression would intensify the downward pressure.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Inflation matters more than the GDP overshoot, and it looks great.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Demand for core capital goods remains weak; rebound in claims does not change the low and flat trend.
US
Consistent with another solid consumption print in Q1.
US
- The Fed is understandably cautious after the “transitory” mess, but its rate forecasts are too cautious.
- We expect the FOMC gradually to lower both its inflation and rate forecasts, starting in March.
- Soaring consumer sentiment, thanks to cheaper gas and rising stocks, signals continued solid spending.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Starts data are noisy, but a modest housing recovery is underway.
US
UAW strike impact fully reversed in December; manufacturing output ex-autos is still falling outright.
US
A solid end to 2023 means a positive carryover into Q1.
US
Startling, but not definitive.
US
Wait for the core PCE before rushing to inflation judgment
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Stock market-driven upturn in sentiment hides soft activity numbers
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Behind the headline, the trend in job growth is slowing, with more softening to come.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Too soon to conclude that downward trend is in place.
US
- The labor market is weaker than the headline December jobs numbers, but it’s hardly terrible.
- Either way, the Fed’s policy decisions will be driven more by the inflation numbers than the jobs data.
- The soft December ISM services survey is not definitive, but a repeat in January would get our attention.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Sharp drop in claims probably is noise; the ADP is deeply unreliable.
US
Better than expected, but still poor.
US
- The November PCE report highlights the significant downside risk to the Fed’s inflation forecast.
- The Fed eventually will have little choice to ease by more than their current forecast of 75bp this year.
- Housing and manufacturing activity are near a floor, but any recovery will be slow going.
Ian Shepherdson (Chief Economist, Chairman and Founder)US