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This page has been updated with additional analysis since first publication. Encouraging, but not enough for interest rates to be cut again in September The further easing in wage growth will be welcomed by the Bank of England as a sign that labour market …
10th September 2024
Getting an early steer on whether an economy has entered recession requires a holistic assessment of a variety of indicators to see if multiple variables are flagging recession at the same time. In this vein, we have created Economic Momentum Indicators …
9th September 2024
Unemployment rate drops back The 142,000 rise in non-farm payrolls and fall in the unemployment rate to 4.2% confirmed that some of the weakness in July was due to temporary factors, with the number of people on temporary layoff falling by 190,000. That …
6th September 2024
That August payrolls report was one of the more keenly awaited data releases in a while – but what do its details suggest about how the Fed is likely to start monetary easing when it meets later this month? On the latest episode of The Weekly Briefing …
The communications from the Bank of Canada this week suggest that the rise in the unemployment rate in August is unlikely to be enough to trigger larger interest rate cuts, which is probably a sign that the Bank is comfortable with the extent of loosening …
The lingering concerns over whether the US manufacturing sector and overall economy are heading for recession begs the question of whether the UK’s manufacturing sector and overall economy will go the same way. The fear is that the recent period in which …
Labour market experiencing slowdown rather than collapse The 142,000 gain in non-farm payroll employment in August was probably just enough to tip the Fed in favour of a measured 25bp rate cut this month, rather than a more dramatic move, but the labour …
Unemployment rate heading toward 7% The rebound in employment in August should soothe fears that the economy is taking a turn for the worse, although the 0.2%-point jump in the unemployment rate to 6.6% presents clear upside risks to our forecast that it …
This page has been updated with additional analysis since first publication. Modest housing market recovery continues The second consecutive monthly rise in the Halifax house price index in August supports our view that the fall in the Nationwide house …
RBA will need to see more progress on inflation National accounts data released this Wednesday made for grim reading. They confirmed that Australia’s run of sluggish activity continued in Q2, with real GDP rising by a tepid 0.2% q/q for a third …
Regular pay growth hits 32-year high According to preliminary figures for July , regular wage growth jumped from 2.2% y/y to 2.7%, which is where we had expected it to peak in the second half of this year. And an alternative gauge that the Bank of Japan …
ISM services survey adds little to the 25bp vs 50bp debate Although the ISM services index was essentially unchanged in August, that is still something of a relief following the weak ISM manufacturing report earlier this week and the gloomy tone of the …
5th September 2024
The economy looks to be entering a period of below-potential growth, characterised by excess supply in the goods and labour markets. This will keep downward pressure on core inflation, which we think will reach the Bank of Canada’s 2% target by the middle …
Overview – The economy is on the mend and underlying inflation seems to be levelling off around the Bank of Japan’s 2% target. Accordingly, we still expect a final rate hike in October. But as inflation falls below target next year and the spring wage …
Regular earnings growth will approach 3% While weaker growth in bonus payments weighed on overall wage growth, base pay rose by the most since 1992 in July and we think it will continue to surge in the coming months. The preliminary estimate released …
While the risks of a more severe downturn in industry have increased in advanced economies, we still expect manufacturing output to slow rather than crash in the coming months. Even if output were to fall sharply, it wouldn’t necessarily have big …
4th September 2024
Although job openings fell sharply in July, the totality of the JOLTS data points to a labour market that continues to normalise, rather than one rapidly deteriorating. That leaves it up to the August Employment Report to determine whether the Fed kicks …
Following its third consecutive 25bp interest rate cut today, the communications from the Bank of Canada reiterated that further cuts are likely. We expect 25 bp cuts at the final two meetings this year. While Governor Tiff Macklem left the door open to a …
The dynamism of the industrial sector means that market-level outperformance is often only achievable for short periods, because either relative value deteriorates or new supply quickly completes. Houston could be the latest example of that, with recent …
Another 25bp cut, but little sign the Bank considered a larger move Following its third consecutive 25bp interest rate cut today, the communications from the Bank of Canada reiterated that further interest rate cuts are likely. The tone of the …
Net trade set to weigh on GDP again this quarter The July trade data suggest that net trade will weigh on third-quarter GDP growth, but that is hardly cause for concern when it reflects the continued strength of imports, painting a better picture of …
Trade balance improves, but for the wrong reasons The improvement in the goods trade balance in July was for the wrong reasons, with a fall in imports outpacing a decline in exports. The weakness was due to sharp declines in motor vehicle trade, which …
Recovery delayed The drop in home purchase mortgage applications in August is surprising given the sharp fall in mortgage rates the month before. Some would-be buyers may be delaying their purchases due to increased concerns about the economic outlook, …
Australian economy will soon turn a corner Although activity likely bottomed out last quarter, the ongoing weakness in private demand raises the risk that the RBA will cut rates sooner rather than later. The 0.2% q/q rise in real GDP last quarter was a …
While the headline-hitting surge in immigration last year was mainly driven by a spike in unauthorized movement, legal immigration has picked up from its pandemic lows, which is good news for many multifamily markets across the US. With top destinations …
3rd September 2024
Our migration dashboard highlights key trends in the US at both the state and metropolitan area level. If you have subscriber access to the data underlying this new dashboard, you can download it via the menu options in the top right of each chart or …
The latest PMIs suggest that the outlook for global industry remains bleak, particularly in advanced economies. And although price pressures seem to have increased, we doubt that this marks the beginning of a sharp rebound in DM goods inflation, meaning …
A disappointingly small rebound in the headline index of the US ISM manufacturing survey for August appears to have put some relative pressure on cyclical sectors of the S&P 500 today, which is down more than 1% the time of writing. The bigger picture, …
Manufacturing stuck in a rut The ISM manufacturing index was essentially unchanged in August, leaving it consistent with manufacturing output and GDP growth losing momentum in the third quarter, and a sharp drop in the new orders index reduces the …
Several advanced economies have raised tariffs on imports of green technologies and semiconductors from China to address their growing trade deficits in these goods and tackle a perceived strategic weakness. As long as the process is gradual, this …
Stretched affordability to sap momentum from house price rally With transaction volumes moderating and inventory rising, we expect the Australian housing market to cool in months ahead. In seasonally-adjusted terms, house prices across Australia’s eight …
2nd September 2024
Harris supports dramatic increase in taxes After unveiling plans to boost spending and cut taxes for the middle-class in a big speech a couple of weeks ago, Vice President Kamala Harris has quietly acknowledged since then that she intends to pay for those …
30th August 2024
Second-quarter GDP growth surprised to the upside of the Bank of Canada’s forecast, but the evidence that growth slowed sharply over the quarter suggests that third-quarter growth will be much weaker than the Bank is anticipating. That raises the chance …
The Prime Minister’s statement this week that “there is a budget coming in October, and it’s going to be painful…those with the broader shoulders should bear the heavier burden” has prompted yet more speculation about how much tax revenues will rise and …
Price pressures well behaved despite strength of real economy The July income and spending report shows price pressures remaining muted despite the strength of real consumption. The latter suggests that third-quarter consumption growth will be 3.7%. Even …
Despite Q2 upside surprise, data raise chance of a 50bp cut next week Although second-quarter GDP growth surprised to the upside, the downgrade to GDP in June and preliminary estimate that GDP was unchanged again in July imply that third-quarter growth …
This page has been updated with additional analysis since first publication. Steady improvement in credit is supporting the economy July’s money and lending data provide further evidence that a steady improvement in the flow and demand of credit is …
This page has been updated with additional analysis since first publication. Lower mortgage rates may soon help house prices regain momentum Despite the recent declines in mortgage rates, the small fall in the Nationwide house price index in August …
A solution in search of a problem The Australian government’s migration policy is in the spotlight once again as the Senate deliberates over legislation aimed at capping international student commencements in the country. The proposal put forward by …
Activity rebounding, inflation levelling off at 2% The activity and inflation data released today increase our conviction that the Bank of Japan will press ahead with another rate hike. The rebound in industrial production and the rise in retail sales in …
This page has been updated with additional analysis since first publication. Consumption rebound likely to be gradual The softness in retail sales last month suggests that household consumption growth will remain muted this quarter. Insofar as spending …
Economic recovery lost some steam in Q3 The July activity data suggest that the economic recovery continued in Q3 but shifted down at least one gear. The 2.8% m/m rise in industrial production in July was a touch weaker than the analyst consensus of 3.3% …
This page has been updated with additional analysis since first publication. Underlying inflation seems to settle around 2% The jump in the unemployment rate in July should reverse before long as economic activity rebounds. Meanwhile, the renewed pick-up …
We forecast a healthier 170,000 gain in non-farm payrolls in August, alongside a small fall in the unemployment rate to 4.2%. Wage growth should remain at 3.6%. Together, that would be consistent with a 25bp rate cut by the Fed next month. Beryl impact on …
29th August 2024
Core inflation to come in lower than Bank’s forecast Economic growth remains below potential Bank to cut interest rates by 25bp at each meeting until 2.50% The dovish communication following the last meeting and the encouraging July CPI report leave …
28th August 2024
This page has been updated with additional analysis since first publication. Disinflation has further to run Inflationary pressures are easing gradually, but the details of today’s CPI release won’t bring the RBA any closer to dropping its hawkish bias. …
