Solid set of numbers, the positive surprise easily outweighing mild downward revisions to the February data. Consumption should have been supported by tax refund cheques, which likely helped offset the drag from higher gasoline prices,
Soft industrial production number which reflects tepid manufacturing activity where growth is now running at its lowest rate is two years. This matches the deterioration we’ve seen on the orders side of the Federal Reserve bank surveys and fits with the upward pressure seen on the inventory side.
Outflows slowed in February amid a return of private overseas investors into the fixed income universe, which offset further selling in the equity space.
Based on how far the US term premium has fallen, to see any further meaningful decline in bond yields we’d…
In 1969 the US population was 125mn smaller. You also need to go back to 1969 to find a lower jobless claims number.
The slowdown in global growth has been accompanied by an inversion of the US yield curve — the one recession…
A stronger payrolls number, but after the disruptions of last month (weather knocking around 80k off the headline figure) the bounce could still have been a stronger. But enough to maintain sold employment growth, which continues to defy estimates that the labour market is tight...
Another disappointing report and while the yoy rate is still expanding (more robustly once ex-ing out the more volatile items) it seems clear that the 2017/18 mini-boom has exhausted itself. As far as shipments go, growth still looks better, but we’re still seeing inventories rising.
Price data basically confirms what we knew, inflation is back in a moderating phase with dip in core highlighting that. Income a little below expectations but the underlying wage story remains constructive, so nothing to be concerned about. Although in terms of Fed priorities the pick-up in wage growth is not enough to offset broader demand concerns.
Final US GDP numbers for Q4 revised down a little bit but not that much of a change in year-on-year terms, with growth overall running a shade below 3% which isn’t bad. Government was weak but investment still looks strong and inventory build also helped headline. In fact, investment looks too strong given how corporate profits have performed. Ditto for employment vs. profits.
Excess reserves have been falling at a far quicker pace than the overall contraction in Fed balance sheet (Fig1). This is perhaps a cleaner way of showing the same thing, using just Treasury securities which share more similar qualities in terms of value as capital (Fig2).
Manufacturing weakness persists, with strong energy output insufficient to offset broader downshift. Looking at Fed survey orders data we’re not yet at a point to bounce. So production side likely to remain an overall drag on economic activity over the remainder of the first quarter.
US January durable & capital goods orders and shipments & February PPI chart pack
US February consumer prices chart pack
US February non-farm payrolls report & wages chart pack
US Q4 productivity & labour costs chart pack
US Q4 GDP & weekly jobless claims chart pack
US January industrial production chart pack
US December retail sales (shutdown disrupted), January PPI, weekly jobless claims chart pack
US January CPI report and real wages chart pack