10 Things You Need to Know: April 9, 2024
Key data releases this week include: NFIB Small Business Optimism (Tue), CPI (Wed), FOMC meeting minutes (Wed), PPI (Thu), and consumer sentiment (Fri).
Haver
April 5, 2024
Nonfarm payrolls increased 303,000 (1.9% y/y) in March after rising 270,000 in February. Expectations had been for a 203,000 rise in the Action Economics Forecast Survey. Average hourly earnings increased an expected 0.3% last month (4.1% y/y). The unemployment rate eased to 3.8% in March, matching expectations.
Haver
April 3, 2024
The U.S. ISM Services PMI fell to 51.4 in March, the lowest reading since December, from 52.6 during February. The figure indicated expansion for the 15th consecutive month but stood below its recent high of 67.1 in November 2021. A small increase to 53.0 for March had been expected by the Action Economics Forecast Survey. The prices paid index declined to 55.1 in March, its second consecutive monthly fall, from 58.8 in February.
Haver
April 5, 2024
Consumer credit outstanding rose $14.1 billion (2.5% y/y) during February following a $17.7 billion January increase. A $15.7 billion rise had been expected in the Action Economics Forecast Survey. The ratio of consumer credit outstanding to disposable personal income held steady at 24.4% in February, below the December 2022 high of 25.4%.
Capital Economics
April 8, 2024
The latest data are consistent with our view that the euro-zone will remain close to recession in the near term. With the labor market softening and inflation continuing to fall, the ECB is very likely to start cutting rates in June. Elsewhere, the SNB started loosening policy in March and we expect the Riksbank to follow suit in May. Norges Bank won’t be far behind.
Bloomberg
April 4, 2024
India’s $3.5 trillion economy is still significantly smaller than China’s. Even so, strong growth prospects, and the slump in China, mean India could surpass its northeastern neighbor to become the biggest contributor to global growth on a purchasing power parity basis as soon as 2028. Using US dollar GDP weights, India could reach that milestone in 2035.
Barron’s
April 8, 2024
Central-bank buying has been the prime motivator of gold, especially by the People’s Bank of China, according to a client note from Bank of America. Physical demand for gold in China has been strong, both for jewelry and investment. The declines in Chinese real estate and equities have further bolstered gold’s status as a store of wealth for investors there.
Barron’s
April 8, 2024
Demographics and aging trends could create significant headwinds for economic growth, as aging populations historically have experienced declines in work, productivity, and spending. The U.S. fertility rate peaked in 2007 at 2.12 children per woman. It is expected to level out this year at 1.70 births per woman and remain there through 2054. That means population growth increasingly will be driven by net immigration.
Barron’s
April 8, 2024
Going back to 1928, the S&P 500 averaged a 1.4% gain during the fourth month of the year, more than double the average rise of 0.6% for all other months of the year. Odds favor that type of gain, given the market’s advance to start the year—the S&P 500 has averaged a 1.5% gain in years when the index has climbed 10% or more during the first quarter.
The Associated Press, The Wall Street Journal, Bloomberg
April 3, 2024, April 3, 2024, April 3, 2024
Recent instances of hotter-than-anticipated inflation numbers don’t “materially change the overall picture,” according to Federal Reserve Chair Jerome Powell, who indicated that interest-rate cuts are likely still coming this year. However, Powell noted that “we do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2%.”