Growth during the first quarter most likely expanded at a 2.35% pace based on our RSM economic forecast in contrast with the 2% consensus. This growth, though, is not likely to last. Given the emerging consensus among economists that the economy will fall into a recession this year, a ... READ MORE >
interest rates
Initial jobless claims rise amid labor market slowdowns
New filings for jobless benefits rose for the third straight week to a near 18-month high, adding more signs of a slowdown in the labor market, one of the last defenses against a recession. New claims, which are a proxy for layoffs, increased by 2.1% to 245,000 for the week ending April ... READ MORE >
Canadian inflation fell to lowest since August 2021
Canada’s inflation rate dropped to 4.3% in March on an annual basis from 5.4% in the prior month, driven largely by comparisons to the surging energy and food prices of a year ago, according to data released by Statistics Canada on Tuesday. While disinflation was expected as the Bank of ... READ MORE >
Lower-than-expected retail sales raise recession probability
Retail sales dropped for the second month in a row in March as demand for goods and food services continued to ease, suggesting the end of the business cycle. If interest rate increases take six to 12 months to be felt in the economy—the accepted wisdom before the pandemic—then it is likely ... READ MORE >
Jobless claims and producer prices point to a further slowdown
New data on the labor market and inflation released on Thursday continued to show a slowing economy as it heads to a likely recession. For the Federal Reserve, that data bolstered the case that it will pause its rate increases after one final hike in this cycle on May 3. Whether to have that ... READ MORE >
March inflation data points to a Fed rate peak in May
The inflation outlook improved in March because of a mix of year-over-year base effects and a significant decline in energy prices, all of which caused the top-line reading to decline to 5% from 6% previously. The core estimate, which excludes food and gasoline, eased to 5.6%, while the ... READ MORE >
After flush years, households show a reluctance to borrow
A pillar of the American economy in the recovery from the pandemic has been household balance sheets, which have been bolstered by a robust labor market and nominal income growth. But now, with the prospect of tighter lending standards and reduced spending caused by the recent banking ... READ MORE >
Job openings and factory orders soften amid recession concerns
Job openings and factory orders came in lower than expected on Tuesday, continuing to show signs of softening economic demand that should work in the Federal Reserve's favor in fighting inflation. When the new data is combined with softer economic data released recently, the risk of a ... READ MORE >
Manufacturing continues to show recession signs
The manufacturing sector contracted for the fourth month in a row in March, according to new data released by the Institute for Supply Management on Monday. The pace of the decline accelerated as the impact of steep interest rate hikes continued to weigh on overall demand. It has become evident that ... READ MORE >
Bank deposit carousel continues as investors search for yield
Outflows of deposits from small banks paused last week, while outflows from large banks increased. This implies that funds continue to flow out of traditional banking and into money market funds or other alternative investments as investors search for yield. While it is too soon to declare the ... READ MORE >