- Equipment investment likely leapt by about 7% in Q2, driven by surging transport and computer spending...
- ...But these components are volatile; high borrowing costs will weigh on capex unrelated to the AI boom.
- The jump in jobless claims was due to auto plant closures and Hurricane Beryl, but the trend is rising too.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The manufacturing downturn is over, but growth in output in the second half of this year will be sluggish.
- High mortgage rates and excess new home inventory suggest single-family housing starts will fall further.
- We look today for a pick-up in initial jobless claims, but the data are prone to unpredictable swings in July.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The jump in core retail sales in June has the hallmarks of a weather-related blip; expect a pullback in July.
- We expect partial recoveries in June housing starts and building permits, but a poor outturn for Q2 overall.
- Manufacturing output likely grew briskly in both June and Q2, but the recovery will slow in Q3.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Our Homebase model points to a 200K rise in private payrolls, but its errors in prior Julys have been big...
- ...So we will place more weight this time on the NFIB, S&P Global, ISM and regional Fed business surveys.
- Headline retail sales probably fell in June, due to a slump in sales of autos and gasoline.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The June core PCE deflator likely undershot the Fed’s implied forecast pace for a second straight month.
- The jump in PPI trade services looks like noise; margins likely will come under renewed pressure in Q3.
- People expect higher unemployment and lower inflation; the Fed needs to ease, soon.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Plunging airline fares flattered June’s tiny rise in the core CPI, but most services prices were subdued too.
- CPI data and our PPI forecasts map to a 0.17% rise in the core PCE deflator, but our estimate will shift today.
- The Michigan consumer sentiment index probably rose slightly in July, lifted by a surging stock market.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Auto insurance prices likely rebounded in June, driving a 0.3% increase in the core CPI...
- ...But we look for chunky falls in vehicle prices and a modest increase in core-core services prices.
- We look for a rise in jobless claims today, as auto plant and school closures overwhelm the seasonals.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Mr. Powell still wants more good inflation data, but the tiring job market is gaining more of his attention.
- The NFIB survey ticked up in June, but pressure on the economy from high rates remains intense.
- The pick-up in Redbook sales almost certainly overstates current momentum in consumers’ spending.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- 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
- 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
- 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
- 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
- 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
- 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
- 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
