Intro Headline inflation softened in March, with the Consumer Price Index (CPI) posting a marginal monthly decline and the annual rate easing to 2.41%, down from 2.81% in February. Underneath the headline, we mostly saw a continuation of the trends that have been in place since early 2023, a slowing but elevated contribution from shelter...Read More
Intro Total outstanding consumer credit declined by $810 million m/m in February, pushing the y/y growth rate to -1.0%, its largest annual decline since October 2010. Also in February, the personal saving rate increased to 4.6%, an eight-month high. This dynamic, alongside the slowdown in real PCE and sentiment data, likely reflects an increasingly cautious...Read More
Intro Private sector payrolls increased by 155,000 in March, according to the latest ADP National Employment Report. This was above the prior month, which was revised higher to 84,000 from 77,000. Underneath the headline, job gains by industry and by firm size displayed better breadth and improving y/y trends. Labor Market The Signals: National ADP...Read More
Intro Retail Sales accelerated by 0.2% m/m in February, following a downwardly revised -1.2% m/m (initial -0.9%) pace in January. Importantly for the 1Q25 GDP calculation, the Retail Control Group recovered its -1.0% m/m decline in January with a 1.0% m/m advance in February, putting the y/y pace at 4.4%. Overall, trends in nominal consumer...Read More
Intro In February, total nonfarm payrolls increased m/m by 151,000, the unemployment rate remained low at 4.1%, and real average hourly earnings accelerated y/y to 1.2%, according to data from the U.S. BLS. Over the next few months, there will be a few areas to monitor on the labor side as potential implications related to...Read More
Intro Over the last week there has been more attention paid to updates in the Atlanta Fed GDP Now for 1Q25, as the q/q estimate ticked down further to an annualized rate of -2.82%. This shift in direction was driven by a slowdown in Imports and Personal Consumption Expenditures. Alongside this change in growth estimates,...Read More
Intro The direction in price for WTI Crude Oil has tilted the range of possible outcomes further away from our previous expectations for inflation in the first half of 2025. While inflation may remain above the FOMC’s 2% target, there is a rising probability that the Consumer Price Index will decelerate on a rate of...Read More
Intro Our expectations coming into the quarter were for consumer data to remain at levels that would contribute to the FOMC remaining on pause. Retail sales declined by -0.9% m/m in January, but underneath that seasonally adjusted Headline number the details were less worrisome. However, we will be looking for better prints in February and...Read More
Intro The Consumer Price Index accelerated by 0.5% m/m in January, pushing the y/y pace to 3.0%. Importantly, the All Items excluding Shelter Index accelerated by 2.1% y/y, contributing 1.4 points to headline growth. The major takeaway from this release is that inflation remains above the FOMC’s 2% target rate of inflation and has been...Read More
Intro Monitoring the credit cycle is critical to understanding where we are likely at in the economic cycle. There are several indicators we can track to help gauge which slope of the credit cycle sine curve we are likely moving along. By varying degrees, corporate bond issuance, credit spreads, credit expectations, and commercial bank loan...Read More
