Job openings fell in January yet still came in hotter than expected, offering the Federal Reserve no relief in its fight against inflation. The central bank faces a crucial decision when it meets in two weeks: Whether to maintain its current peak policy rate of 5.5%, as it had announced a few ... READ MORE >
Inflation
RSM US Financial Conditions Index tightens as market sees a hard landing
The RSM US Financial Conditions Index inched down to 0.6 standard deviations below neutral from 0.4 previously as policymakers, investors and firm managers prepare for a period of higher interest rates and persistent inflation. Markets are moving to price in a hard landing around a ... READ MORE >
February’s jobs report is likely to generate more questions than answers
The February jobs report will most likely provide another questionable estimate of labor conditions in the American economy, overstating the pace of hiring in the private sector. We expect a net change in total employment of 310,000 when the data is released on Friday, with many of the gains ... READ MORE >
New jobless claims fall again amid strong labor market
Initial claims for unemployment benefits inched down further last week, remaining near a multi-decade low amid a persistently tight job market. New claims dropped by 2,000 to 190,000 for the week ending Feb. 24, lower than the pre-pandemic average of 218,000, according to Labor Department ... READ MORE >
Consumer confidence falls in February amid a worsening outlook
American consumer confidence fell for the second straight month in February as expectations deteriorated to the lowest point since last July, the Conference Board reported on Tuesday. The top-line confidence index dropped to 102.9 from 106.0 in the prior month, while the expectations index ... READ MORE >
Canada’s economy stalled even as consumer spending held up
The Canadian economy stalled in the fourth quarter, eking out a 0.03% gain in a significant downside surprise from expectations of a 1.6% increase. But the disappointing growth underestimated the spending strength of the Canadian consumers. Final consumption expenditures rose by a sharp 2.1%, after ... READ MORE >
Business spending on equipment rose in January
Investments in business equipment posted a sharp rebound in January after two consecutive months of disappointing declines. While the Commerce Department’s data released on Monday showed some resilience from private businesses, there were reasons to be cautious because January’s data can be ... READ MORE >
Bond market shows a shift in inflation expectations
In the first weeks of the year, financial markets have gone from anticipating a near-term end to the Federal Reserve’s price stability program to the realization that the Fed is not yet done. The S&P 500 increased by 9.3% through Feb. 2 as part of this broad expectation that the Fed would pause its ... READ MORE >
January’s spending shows a hot economy despite rate hikes
January’s data on inflation and spending came in hotter than expected on Friday, making the case that the Federal Reserve will need to raise interest rates three more times and bring its peak policy rate to 5.5%. Rising prices and spending indicated that overall demand remained robust, which ... READ MORE >
RSM revises its Fed call as inflation proves sticky
The common thread between the inflation reports for January was a reacceleration in service-based inflation that is proving sticky and is not likely to abate enough for the Federal Reserve to pull back on interest rate increases. For this reason, we are changing our call on the path of monetary ... READ MORE >