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United States: not such a weak job report

Unemployment dropped, wage increases were higher than expected and the average workweek inched up. The overall situation remains healthy in the US labour market. Non-farm payroll employment rose by a soft 151,000 m-o-m in January, below consensus expectations (190,000). December’s figure was revised down (from 292,000 to 262,000), but November’s number was revised up (from […]

United States: the ISM Non-Manufacturing index fell further markedly in January

The ISM Manufacturing index stabilised at a low level in January. But its Non-Manufacturing counterpart fell further heavily, although it remained pitched at a still relatively healthy level. Nevertheless, together with most other economic data published recently, these surveys unfortunately confirm that growth entered 2016 with a soft momentum. ISM Manufacturing index stabilised at a […]

US wages & monetary policy: not-so-dovish FOMC statement in January

Besides GDP data, today saw some other key data being published: the quarterly Employment Cost Index (ECI), admittedly the most reliable measure of wages and salaries. Following Wednesday’s less-dovish-than-hoped FOMC statement, prolonged uncertainty over inflation prospects and seemingly some modest pick-up in average hourly earnings increases – the other main statistic on wages – publication […]

United States: soft growth in Q4, but a serious downturn remains unlikely

US real GDP, curbed by lower stockbuilding and a slowdown in consumption growth, grew by a soft 0.7% in Q4. We have cut our forecast for 2016. However, we still expect reasonably healthy growth (2.0%). In Q4 2015, US real GDP grew by a weak 0.7% q-o-q annualised, just a fraction below consensus estimates (+0.8%). […]

We expect the Fed to remain on hold in March and that it will hike ‘only’ twice this year

After its meeting earlier this week, the Federal Open Market Committee (FOMC) published a statement where, as widely expected, it acknowledged that “economic growth slowed late last year”. It also added a comment that “the Committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, […]

United States: December core retail sales disappoint

Today’s retail sales report was without a doubt quite disappointing. Although consumption growth seems to have slowed noticeably in Q4 (probably to slightly less than 2.0%, after 3.0% in Q3), we remain sanguine on consumption growth in 2016. Nominal total retail sales fell by 0.1% m-o-m in December, in line with consensus expectations. Total sales […]

United States: strong job creation, disappointing wage numbers

December’s employment report showed strong job gains, with noticeable upward revisions for the previous two months. However, the unemployment rate remained stable at 5.0% for the third month in a row and wage increases were surprisingly soft (+0.0% m-o-m). Non-farm payroll employment rose by a strong 292,000 m-o-m in December 2015, well above consensus expectations […]

United States: December ISM surveys below expectations

Both ISM indices dropped further m-o-m in December. However, while the Manufacturing index fell to a fresh cycle-low, its Non-Manufacturing counterpart remained pitched at a still relatively healthy level. Nevertheless, most other economic data published recently were surprisingly soft. We revise our forecast for Q4 GDP growth from 2.0% to 1.5%. ISM Manufacturing index fell […]

The US Federal Reserve brings an end to a seven-year period of virtually zero interest rates

In line with what almost every forecaster was expecting, at its meeting yesterday, the Federal Open Market Committee (FOMC) decided to hike interest rates, and raised the target range for the Fed funds rate by 25bp from 0%-0.25% to 0.25%-0.5%. The Fed fund rate had been at virtually zero for exactly seven years and the […]

United States: core retail sales rose robustly in November

Today’s retail sales report was rather upbeat. Although consumption growth can be expected to slow somewhat in Q4, we remain sanguine on overall consumption growth in 2016. Nominal total retail sales increased by 0.2% m-o-m in November, slightly below consensus expectations (+0.3%). Total sales were dented by a 0.8% m-o-m fall in nominal sales at […]

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