Author Archive

Surprisingly hawkish FOMC minutes unsettle observers

Read full report here The minutes of the April Federal Open Market Committee meeting published on 18 May surprised by their hawkish tone. The key phrase that unsettled observers was that should conditions continue to improve, “it likely would be appropriate for the Committee to increase the target range for the federal funds rate in […]

Core U.S. retail sales surge

Full report April US retail sales The US retail sales report for April was very encouraging, with core retail sales increasing strongly month on month (m-o-m) in April, while the figures for February and March figures were revised upward. Consumer spending growth should approach a strong rate of 3.0% q-o-q annualised in Q2. According to the […]

US Job gains softer than expected in April

Read the full article here April’s US employment report was mixed. Job creation was relatively soft and the unemployment rate remained stable for ‘bad’ reasons. However, in the current economic context, employment growth remains healthy overall. Wage numbers were relatively upbeat, and the proxy for household income was quite strong. In light of the figures […]

Recent rebound in ISM indices confirmed in April

Read the full report here The US ISM Manufacturing survey for April 2016, published on May 2, dropped back a little, from 51.8 in March to 50.8, below consensus expectations (51.4). However, the level recorded in March was an eight-month high. And the April figure is well above the lows registered at the turn of […]

The Fed is likely to wait until September before hiking rates

Read the full report here In Friday's report on income and consumption, data were also published on the PCE deflator, the price measure targeted by the Fed in gauging inflation. The core PCE price index (excluding food and energy) increased by 0.1% month-on-month (m-o-m) in March, in line with consensus expectations. On a year-on-year (y-o-y) basis, […]

US Q1 growth disappoints, but improvement likely

Read the full report here US real GDP, buffeted by numerous headwinds and lacking momentum, grew by a feeble 0.5% in Q1 2016. Seasonality factors mean the first-quarter GDP growth rate can be very volatile, but Q1 growth was a clear disappointment overall, particularly as growth in Q4 2015 was already soft (+1.4% q-o-q annualised). […]

Despite March disappointment, we remain upbeat on US spending

According to the US Department of Commerce, nominal total retail sales fell by 0.3% m-o-m in March, well below consensus expectations (+0.1%). However, February’s number was revised up slightly, from -0.1% to +0.0%. In March, total retail sales were dented by a 2.1% m-o-m fall in nominal auto sales—not a big surprise as previously published […]

United States: both ISM indices rose in March

The ISM Manufacturing survey for March 2016 was published on Friday last week. The headline reading bounced back further from 49.5 in February to an eight-month high of 51.8 in March, above consensus expectations (51.0). Although the ISM index has recovered markedly so far this year, it was particularly weak at the end of last […]

US monetary policy: a second rate hike in June remains the most likely scenario

As widely expected, at yesterday’s FOMC meeting, the Fed chose to ‘stand pat’. Although yesterday's FOMC meeting was perceived as sounding ‘dovish’ and Fed funds rate projections were cut, the Fed still expects to hike at least twice this year. On our side, we continue to look for two rate hikes this year, the first probably […]

US consumption: disappointing retail sales report

Nominal total retail sales dropped by 0.1% m-o-m in February, slightly above consensus expectations (-0.2%). However, January’s number was revised down markedly from +0.2% to -0.4%. Total sales were dented by a 4.4% m-o-m fall in nominal sales at gasoline stations (on the back of sharply lower gasoline prices). Nominal auto sales decreased by 0.2% […]

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