US Personal consumption, which comprises roughly 70% of overall US GDP, has proved remarkably resilient under the cloud of trade uncertainty and the darkening economic picture overseas. However, retail sales fell in September for the first time in seven months. The 0.3% decline in headline sales was dragged down by a sharp drop in auto [...]
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US The optimism among small businesses took another leg down in September, with fewer businesses reporting that they expected sales and the economy to improve. At 101.8, the NFIB small business index is not quite as low as it was at the start of the year following the stock market’s sharp selloff and the longest [...]
US Consumer Confidence fell by a larger than expected 9.1 points to a still respectable 125.1. Consumers grew more cautious about both the present situation and future conditions. The robust assessment of the labor market a month earlier was also completely reversed. The Conference Board’s survey was out of sync with the University of Michigan’s [...]
US An unusually divided Federal Open Market Committee cut its target rate a quarter point to between 1.75% and 2.0% and left the door open to additional cuts. Two members of the committee dissented, arguing rates should be left unchanged. One member voted for a deeper, half-point cut. US Federal Reserve Chairman Jerome Powell offered [...]
US CPI inflation is beginning to heat up more materially. Core prices rose 0.3% for the third straight month, pushing the three-month annualised inflation rate to a 13-year high. The year-on-year rate hit 2.4%, which suggests PCE inflation (which tends to run about 0.3% below CPI inflation) may finally be at the Fed’s target. A [...]
US The ISM manufacturing index fell below 50 in August for the first time since 2016, as more firms reported a contraction than an expansion in manufacturing activity. The decline in the new orders subcomponent was even more worrisome. At 47.2, new orders tied the cycle low set in 2012, and suggests activity will remain [...]
US The second estimate of Q2 2019 GDP showed the economy grew at a 2.0% annualised pace, which was only a tenth lower than the initial estimate, most likely the consumer carried the weight in the second quarter. But revised data show personal consumption expenditures rose an even stronger 4.7% (4.3% previously), adding 3.1 percentage [...]
US The yield on the benchmark 10-year Treasury note jumped at the start of trading last Monday but later decreased sharply to end the week modestly lower. On Thursday, the yield curve again inverted, with two-year Treasury yields moving above 10-year yields, a closely watched (but not foolproof) indicator of a coming recession. The inversion [...]
US The spread between the US two-year Treasury note and the 10-year note fell below zero for a time this week, setting of a recession warning bells. However, the inversion is not yet persistent, and in the past five such episodes the onset of recession averaged 22 months after inversion. Global bond yields continue to [...]
US Markets opened on Monday to news that China’s onshore USD/CNY exchange rate traded beyond the symbolic 7.00 per dollar for the first time in more than 10 years. This occurred in the wake of President Trump tweeting on August 1 that, “…the US will start, on September 1, putting a small additional Tariff of [...]