Filtered by Region: G10 Use setting G10
Strong control group sales ease fears of consumer slump Although retail sales were unchanged in June, the strong 0.9% m/m rise in control group sales should ease concerns about the plight of the consumer in the wake of the renewed slump in sentiment. …
16th July 2024
The Bank of Canada’s business and consumer surveys point to weak GDP growth, show that firms’ wage expectations are now lower than their pre-pandemic peak, and suggest that consumers are increasingly concerned about the health of the labour market. All …
15th July 2024
Stronger momentum in manufacturing The continued rise in manufacturing sales and new orders suggests that the sector gained some momentum in the second quarter. However, we expect that strength to fade this quarter. The 0.4% m/m rise in manufacturing …
Global Economics Chart Pack (July 2024) …
The latest data indicate that capacity pressures have continued to ease, a trend that should continue over the coming quarters. However, it will be a while before policymakers can be confident that they have broken the back of inflation. Accordingly, we …
The latest housing market data paint an almost ideal picture for the Bank of Canada, with activity improving, but little sign of a surge in house prices that could derail the downward trend in core CPI inflation. Home sales finally turning a corner The …
12th July 2024
"More good data" needed There were mixed messages from Fed Chair Jerome Powell this week in his semi-annual testimony to Congress. Powell said in his opening remarks that the “economy continues to expand at a solid pace” and the unemployment rate is …
More evidence of consumers struggling The further decline in the University of Michigan consumer sentiment index in July adds to the evidence that consumers are increasingly struggling with high interest rates. Although the link between confidence and …
Disinflation in the services sector seems to have stalled in several advanced economies this year. That’s partly because the easiest wins related to food and energy effects are behind us and also reflects some temporary factors. Much now depends on the …
PPI a lot better than it looks Ignore the fact that core PPI increased by a slightly bigger-than-expected 0.4% m/m in June and that May was revised to a 0.3% rise from unchanged. The PPI components that feed into the Fed’s preferred PCE deflator inflation …
We presume there isn’t a statistical relationship between economic performance and success on the football pitch (although we haven’t tested it). But perhaps comparing the economic performance of Spain and England (we use the UK as a proxy) over the next …
RBA will be content to play the waiting game Financial markets have increasingly been paring back their interest rate expectations for the RBA. They are now pricing in a roughly 20% chance that the Bank will hike rates by 25bp this year, down sharply from …
Goods inflation set to remain strong Data released this week showed that producer price inflation has jumped from 0.3% in January to 2.9% in June, though the bulk of that increase is due to a rebound in electricity & gas inflation. Producer prices of …
Still elevated wage growth is partly due to earlier large gains in public sector pay, which are unlikely to be repeated. There are tentative signs that private sector wage growth is slowing, and the wider evidence suggests this process should gather pace …
11th July 2024
It is not clear that Donald Trump, if elected, would gain much from trying to force Fed Chair Jerome Powell out of the role only a year before his term expires anyway. Trump might instead focus his efforts on securing Senate approval for future …
CPI qualifies as ‘more good data’ The muted 0.1% m/m increase in core CPI in June strengthens the case for a September rate cut although, while a lot still depends on the PPI data due tomorrow, our initial estimate is that the core PCE deflator increased …
With shifting Japanese inflation dynamics likely to shrink the Bank of Japan’s opportunity to tighten policy in the coming months, we think its July meeting will end with a decision to raise interest rates for the second – and final – time this year. But …
This page has been updated with additional analysis since first publication. Economic recovery continues to strengthen The stronger-than-expected 0.4% m/m rise in GDP in May (consensus forecast 0.2%, CE forecast 0.3%) will be welcomed by the new …
It is not inevitable that the economic malaise of the past 20-30 years will continue over the next decade. Some of the cyclical forces that have lowered the UK’s economic growth rate will fade and new structural ones, such as Artificial Intelligence (AI), …
10th July 2024
Shipping costs have now risen far enough to start adding to global CPI inflation. However, so far, the boost to prices is probably only in the region of 0.1%, on average. What’s more, surging freight rates to some extent reflect a shift in demand towards …
RBNZ strikes some dovish notes Although it left the Official Cash Rate unchanged at 5.50%, the RBNZ sounded rather dovish in its commentary. The Committee’s messaging gives us greater confidence that the Bank will commence its easing cycle in November. …
While there are tentative signs that Japan’s economy is becoming more dynamic, this has yet to produce significant improvements in aggregate productivity. We still think that a more meaningful pick-up in productivity growth will only happen towards the …
Powell leaves all options open Fed Chair Jerome Powell’s opening statement for his congressional testimony today offers few clues about the potential timing of interest rate cuts, with the key line that the Fed is still looking for “more good data” to …
9th July 2024
We’ve reassessed our expectations for the start of Bank of England rate cuts in light of the latest UK CPI and employment data. Our UK team was online shortly after the latter report to brief clients on our latest forecasts and to answer their questions …
The Monthly Household Spending Indicator is often revised several months later so the plunge in spending in May won’t deter the Reserve Bank of Australia from hiking rates next month if inflation remains hot. According to the Monthly Household Spending …
8th July 2024
Regular earnings growth will approach 3% While base pay will probably be revised down somewhat in the final estimate, the preliminary estimate showed it rising the most in three decades and we expect it to accelerate a bit further over coming months. The …
Trump now has clear lead Trump favourite to beat whomever Democrats pick Following Joe Biden’s disastrous debate performance, which appears to have hit his polling numbers and gone down badly with big donors, there is clearly now a good chance that he …
5th July 2024
There was little to be encouraged by this week, with labour market conditions continuing to soften, the business surveys weak and the real estate board data pointing to a risk of renewed falls in house prices. All that makes it more likely that the Bank …
With the public finances in the UK in decent shape relative to France and the US, and the new UK government committing to greater fiscal discipline, we think investors are right not to worry as much about the UK’s public debt. But there is little room for …
After six weeks of intense discussion about what Labour would do if it won the election (for all our analysis, see here ), we are now there. We set out what Labour’s 174 seat majority means for the economy and the financial markets here and discussed the …
Cracks in the labour market increase the urgency for more cuts The modest decline in employment and rise in the unemployment rate to 6.4% in June raise the chance that the Bank of Canada will cut interest rates again this month, and makes us more …
Payrolls beats, but rest of report adds to concerns Although the 206,000 gain in non-farm payrolls in June beat the consensus at 190,000, this was more broadly a disappointing report when we factor in the 111,000 downward revision to past months and the …
This special episode of The Weekly Briefing from Capital Economics presents our Drop-In briefing to clients the morning after the UK general election. Group Chief Economist Neil Shearing spoke to Paul Dales, Ruth Gregory and Ashley Webb from our UK …
House prices slip back in Q2 As the first economic data release under a Labour government since 2010, the decline in Halifax house prices in June meant that Labour’s tenure got off to a slightly downbeat start. However, while we expect house prices to …
A strong case for an August hold The minutes of the RBA’s June meeting revealed that the Board hasn’t yet shut the door on another rate hike. In our view, the Bank’s tightening bias is not unwarranted. After all, data published this week showed that …
We’re holding a 20-minute online briefing today (9.30am BST 5 th July) to discuss what a Labour government means for the economy and the financial markets. (Register here .) The big shift in the political landscape that has delivered the first Labour …
Government spending probably fell last year In its April WEO, the IMF estimated that Japan’s budget deficit widened from 4.2% of GDP in 2022 to 5.7% last year and will rise further to 6.5% this year. By contrast, we expect the deficit to have shrunk to 3% …
The big shift in the political landscape that appears to be delivering a Labour government with a large majority is unlikely to lead to anything like as big a shift in the economic landscape. But at the margin, Labour’s policies generate some upsides to …
4th July 2024
We expect that a sustained period of below potential growth will help bring core inflation to the 2% target by the end of the year and persuade the Bank of Canada to cut interest rates further, with the policy rate ending the year at 3.75% and settling at …
Following his disastrous debate performance last week, President Joe Biden’s odds of getting re-elected have gone from bad to worse. Former President Donald Trump is now unequivocally the favourite to win this November, even if the Democrats replace Biden …
3rd July 2024
Minutes feel dated given subsequent signs of economic slowdown The minutes of the Fed’s mid-June policy meeting reveal that, not surprisingly given the split in the interest rate projections released at that time, officials were split on the outlook for …
The stronger-than-expected rebound in GDP in Q1 and the improving outlook for households suggests the next government, which the polls ahead of the election on 4th July imply will be a Labour one, will benefit from the economic recovery being a bit …
The overarching theme of the Labour government’s housing policies will be a rebalancing of rights in favour of tenants and aspiring homeowners at the expense of landowners and landlords. That said, given the incoming government’s commitment to creating a …
Surveys consistent with softer growth and inflation The decline in the ISM services index to 48.8 in June, from 53.8, takes it to its lowest since the lockdowns in 2020. Alongside a decline in the ISM manufacturing index, these surveys suggest that GDP …
External trade continues to drag on GDP growth The trade deficit widened slightly to $75.1bn in May, from $74.5bn, as exports fell by 0.7% m/m, outpacing a 0.3% m/m decline in imports. Nevertheless, the decline in exports was more modest than the advance …
Exporters still struggling The fall in exports in May was largely due to lower commodity exports, which should have performed better in June thanks to the boost to oil exports from the completion of the Trans Mountain pipeline expansion. Cutting through …
Despite rising in June, mortgage applications consistent with weak home sales The decline in mortgage rates back below 7% helped mortgage applications for home purchase to rise by 5.1% m/m in June. That gain was tiny in the context of the ongoing …
We expect the RBNZ to leave rates on hold for a seventh consecutive time at its meeting next Wednesday. To be sure, the Bank will probably strike a hawkish tone out of an abundance of caution. However, with the economy in tatters and inflation on its way …
