All Posts Tagged: manufacturing

U.S. Outlook: Signs Still Point to Slower Growth Ahead

Scott Anderson
Chief Economist

Despite stocks hitting record highs in November, the economic tea leaves continue to indicate slower U.S. and global economic growth in the fourth quarter. The Citi U.S. economic surprise index has been slipping since September 25th.

Positive economic surprises have largely come from only housing and labor market indicators over the past month, while retail positive surprises have faded.

Consumer Are Losing a Tug-of-War

October’s retail sales and industrial production releases revealed the continuing tug-of-war between a relatively resilient U.S. consumer and a manufacturing sector that remains mired in a deepening recession.

The U.S. consumer is increasingly looking tired. Retail sales growth is on a clear downtrend, even though overall it is still a long way from recessionary levels of spending.

Retail spending categories last month show most of the consumers’ additional spending went to gasoline stations, food, and motor vehicles – all necessities for most people. Meanwhile, discretionary retail spending categories like clothing, furniture, sporting goods, and electronics were all noticeably weak.

Crisis of Confidence? 

Moreover, weak real average weekly earnings growth of only 0.9% year-on-year through October, rising initial jobless claims, and a large gap between the University of Michigan Consumer Sentiment Index and the Conference Board’s Consumer Confidence measure, indicate consumer spending could continue to slow in 2020. The headwinds for the consumer are blowing a bit harder today.

Today’s retail sales data is consistent with our forecast for 2.3% real consumer spending growth in the fourth quarter. That is far lower than the 2.9% growth in the third quarter and a sizzling 4.6% growth pace in the second quarter. Our view is the longer manufacturers and the global economy struggle, the more that weakness will spread to the overall U.S. labor market and consumer spending.

For more, see my full U.S. Outlook, delivered on November 15.

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U.S. Outlook: October Payrolls – Data Revisions Steal the Show

Scott Anderson
Chief Economist

The U.S. labor market is slowing, just not as quickly as we all thought before the release of the October payrolls report. Despite the substantial headwinds of the GM strike and escalation of the trade war in September, U.S. nonfarm employment managed to increase a better than expected 128k jobs last month.

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U.S. Outlook: Expect Another Fed Rate Cut

Scott Anderson
Chief Economist

The need for another quarter-point Federal Reserve interest rate cut at the end of October continues to increase. In fact, more cuts will likely be needed in the months ahead to stem the tide of slower U.S. and global economic growth.

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U.S. Outlook: Retail Sales Cool in August

Scott Anderson
Chief Economist

Pull back the lens on August’s U.S. retail sales data and a clear slowdown comes into focus. July retail sales growth was twice as brisk as August sales.

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Investment Insights: A fragile mood

Wade Balliet
Posted by Wade Balliet
Investment Strategy

Stock markets continue to swing wildly and notably below their record highs after a surprise bout of volatility last week erased a chunk of this year’s gains. The S&P 500 and global stocks, as measured by MSCI, fell again today, but are still up over 15 percent and 13 percent, respectively, this year.

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