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Recent rebound in ISM indices confirmed in April

Read 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 […]

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% […]

United States: Better-than-expected job gains in February

Non-farm payroll employment rose by a robust 242,000 m-o-m in February, well above consensus expectations (195,000). Moreover, January’s figure was revised up (from 151,000 to 172,000), as was December’s number (from 262,000 to 271,000). Cumulative net revisions for the previous two months thus worked out at a positive 30,000. January’s relatively soft number was partly […]

United States: ISM Manufacturing index bounces back slightly in February

The ISM Manufacturing index bounced back a little in February, but its Non-Manufacturing counterpart eased marginally. We don’t see any reason to alter our growth scenario. Our forecast that GDP will grow by 2.0% in Q1 and 2.0% overall in 2016 remains unchanged. ISM Manufacturing index bounced back in February The ISM Manufacturing survey for […]

United States: core PCE inflation picked up markedly in January

In Friday’s report on income and consumption, data were also published on the Personal Consumption Expenditures (PCE) deflator, the price measure targeted by the Fed. Following higher-than-expected CPI numbers the week before, a relatively marked monthly increase was also expected last Friday. However, the move was even more pronounced than expected and data for the […]

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