10 Things You Need to Know: April 16, 2024
Key data releases this week include: retail sales (Mon), NAHB Housing Market Index (Mon), housing starts (Tue), industrial production (Tue), Beige Book (Wed), existing home sales (Thu), and leading economic indicators (Thu).
Haver
April 15, 2024
Retail sales rose 0.7% (4.0% y/y) during March after increasing 0.9% in February and falling 0.9% in January. A 0.4% March increase had been expected in the Action Economics Forecast Survey. Sales in the retail control group, which excludes autos, building materials, restaurants and gasoline jumped 1.1% in March (5.2% y/y) after increasing 0.3% in February.
Bloomberg
April 15, 2024
The NFIB Small Business Optimism index dropped to 88.5 in March, vs. 89.4 prior and consensus expectations for an improvement to 89.9. The reading is at the lowest level in more than 11 years. Small businesses face a host of challenges such as higher labor costs — including a minimum-wage hike in California that raised pay for about a half-million fast-food workers.
Haver
April 10, 2024
The Consumer Price Index increased 0.4% during March and repeated the February increase. A 0.3% rise had been expected in the Action Economics Forecast Survey. The 3.5% y/y rise was the highest in six months. Prices excluding food & energy rose 0.4% for the third consecutive month 3.8% y/y).
Bloomberg
April 12, 2024
US consumer sentiment declined in early April by more than forecast and inflation expectations increased, underscoring Americans’ frustration with high prices. The University of Michigan’s preliminary April consumer sentiment index dropped to 77.9 from last month’s 79.4, which was the highest since mid-2021. Consumers expect prices will climb at an annual rate of 3.1% over the next year and 3% over the next five to 10 years, a five-month high.
Bloomberg
April 15, 2024
German Chancellor Olaf Scholz warned Chinese officials to address overcapacity and treat foreign firms better, reinforcing criticisms delivered by the United States. “Competition must be fair. We want a level playing field, of course we want our companies to have no restrictions,” he said, identifying dumping, overproduction, and copyright infringement as key areas of concern.
Barron’s
April 15, 2024
Before previous recessions, the fed-funds rate has always been above the growth rate of nominal GDP, Piper Sandler points out. And there has never been a recession after a rally of 8% or more in the S&P 500. (The S&P was up 10% in the first quarter.)
WSJ, Reuters
April 10, 2024, April 10, 2024
Some Federal Reserve officials indicated that inflation might be getting worse during their meeting last month, minutes show. Participants in the meeting were unanimous that inflation readings from the first two months of the year “had not increased their confidence” that inflation was headed back toward the Fed’s 2% target. Fed officials also agreed on a plan to slow the runoff of the central bank’s $7.4 trillion balance sheet “by roughly half” the current pace.
Oxford Economics
April 10, 2024
As expected, the minutes from the FOMC meeting did provide a lengthy discussion on the balance sheet runoff. The vast majority of participants judged that it would be prudent to begin slowing the pace of the runoff fairly soon. Participants generally favored reducing the monthly pace of runoff by roughly half from the recent overall pace. Announcement of plans to adjust the balance sheet runoff will likely come at the May meeting.
Bloomberg
April 11, 2024
Around 35% of company defaults worldwide last year were by “re-defaulters”, a report from S&P Global Ratings showed, the second-highest level since 2008. This is partly due to a rise in the number of issuers rated B- or below. Interest rates being held higher for longer will make it more difficult for high-risk companies, the report noted, especially the ones that have defaulted already.