- April's slowdown in payrolls looks like real weakness; revisions likely will push the numbers down further.
- Near-zero growth in payrolls lies ahead if the NFIB survey retains its status as the best leading indicator.
- The ISM services survey has joined the growing list of surveys showing that labor demand is weakening.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
An uptrend in initial claims is probably still in the pipeline.
Oliver Allen (Senior US Economist)US
- Both the Homebase data and the NFIB survey signal slower job growth in April, but the numbers are noisy.
- One softer print would not trigger a Fed response, but it would make the May number critical for markets.
- The ISM services survey likely will provide further reassurance on the underlying inflation outlook.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Chair Powell batted away talk of a further rate hike, and hinted that labor market fears are emerging.
- Everything will change if payroll growth slows sharply; that won't happen overnight, but it is coming.
- Still no signs of a real manufacturing recovery, and inflation risks from the sector are minimal.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Consumers starting to feel the pinch.
Oliver Allen (Senior US Economist)US
Striking, but not a national bellwether.
Oliver Allen (Senior US Economist)US
Disappointing, but not the end of slowing employment costs inflation.
Oliver Allen (Senior US Economist)US
- The FOMC will likely take a hard line on easing today, despite abundant warnings of a weaker labor market.
- The disappointing Q1 ECI is not definitive; leading indicators signal downward pressure on wage growth.
- Ignore the ADP and JOLTS job openings today; the JOLTS quits rate matters far more.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Year-over-year growth in the ECI likely fell below 4% in Q1, almost back to its inflation target-consistent rate.
- California fast food price rises driven by the minimum wage hike will have a microscopic impact on the CPI.
- Ignore the 3.9% Q2 growth forecast from GDPNow; its estimates are often way off this early in the quarter.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- A second Trump administration apparently has plans for the Fed; none of them are good; some are wild.
- The March rise in the core PCE deflator matched expectations; muted increases are coming in Q2.
- Strong real consumption growth in Q1 was driven partly by a falling saving rate; expect the reverse in Q2.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Housing market activity likely to slow sharply in Q2.
Oliver Allen (Senior US Economist)US
- The Q1 data suggest upside risk to our 0.28% March core PCE forecast, but 0.3% rounded still looks likely.
- Q1 GDP growth was better beneath the hood; the headline was hit by a big foreign trade drag...
- ...But expect drags in Q2 from inventories and residential investment, as well as slowing consumption growth.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Rounding off another weak quarter for equipment investment.
Oliver Allen (Senior US Economist)US
- Durable orders were stronger than we expected in March, but they still fell in Q1 as a whole.
- GDP likely rose by 2.6% in Q1; this week's data have triggered only marginal changes in our forecast.
- Time lags and generous seasonals mean today's initial claims data likely will be little changed, again.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- S&P's employment index has inaccurately pointed to sharp slowdowns in growth in payrolls before...
- ...but its grim message should be taken seriously now, given that it is echoed by the NFIB survey.
- Easter effects point to a downside surprise in durable goods orders ex-transportation.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Residential investment bounced in Q1.
Oliver Allen (Senior US Economist)US