Job openings came in hotter than expected in September, suggesting that the imbalance in the labor market will take longer to resolve than originally anticipated. … READ MORE >
Economics
RSM US Manufacturing Outlook Index: Continued signs of a slowdown
Our composite measure of manufacturing activity shows that the decline has reached more than 1.6 standard deviations below normal. … READ MORE >
FOMC preview: Policy rate moving higher as Fed may prepare to slow pace of price stability campaign
We expect the Federal Reserve to increase its policy rate by 75 basis points to a range of 3.75%-4% when it publishes its policy decision on Nov. 2. Fed Chair Jerome Powell will almost surely utilize the press conference following the FOMC meeting to note that at one point it will make sense to slow the pace of rate hikes as the central bank ascertains the lagged impact of past rate hikes on the real economy. This will be paired with the text of the policy statement, where the Fed will likely retain language stating “that ongoing increases in the target rate will be appropriate.” … READ MORE >
Inflation persists as spending rebounds strongly in September
Friday’s macro data drop continued to require the Federal Reserve to have its foot on the pedal: while inflation data came out slightly better than expected, the key wage inflation metric—the employment cost index—remained elevated, according to the Labor Department. On top of that, spending was much better than expected in September together with an upward revision to August’s print. That means the economy can absorb more monetary tightening. … READ MORE >
U.S. Q3 GDP: 2.6% growth overstates economic activity as probable recession looms
“Sound and fury signifying nothing” is an apt description of the 2.6% (1.8% year-over-year) seasonally adjusted annualized rate of growth in the third quarter of 2022. Excluding trade and inventories, real final sales to domestic private purchasers increased at an anemic 0.1%, which underscores our estimate of an elevated 65% probability of a recession over the next 12 months. … READ MORE >
U.S. new home sales fell 10.9% in September
The steep rise in mortgage rates has been the number one reason for the fall in demand. As the Federal Reserve increases interest rates to combat inflation, mortgage rates have spiked to a multi-decade high of more than 7%. … READ MORE >
Bank of Canada announces smaller-than-expected 50-basis-point hike
Reasons for increasing interest rates are plentiful amid strong core inflation, high inflation expectations, a tight labor market, and excess demand in the economy. … READ MORE >
Consumer confidence falls in October amid inflation concern
Consumer confidence fell below expectations in October as inflation concern persists. The Conference Board’s consumer confidence index was down to 102.5 from 107.8 from a month earlier. … READ MORE >
Risk in UK financial markets eases ahead of new government
U.K. financial markets continue to price in higher levels of risk into the value of holding securities but appear on the verge of turning the corner, RSM’s proprietary data shows. … READ MORE >
As turmoil grows, foreign banks and investors flock to the dollar
Whether it is the purchase of short-term Treasury notes, deposits in U.S. financial institutions or a use of the Fed’s overnight reverse repurchase facility, investors are in a flight to safety … READ MORE >