10 Things You Need To Know: January 30, 2024
Key data releases this week include: FHFA House Price Index (Tue), consumer confidence (Tue), JOLTS Jobs Openings (Tue), FOMC rate decision (Wed), ISM Manufacturing (Thu), consumer sentiment (Fri), factory orders (Fri), and nonfarm payrolls (Fri).
Haver
January 25, 2024
Real GDP grew 3.3% (SAAR) during Q4’23 following a 4.9% Q3 increase. A 2.0% rise had been expected in the Action Economics Forecast Survey. Real GDP grew 3.1% on a Q4/Q4 basis, after a 0.7% rise in 2022. Growth averaged 2.5% last year versus 1.9% in 2022. Personal consumption expenditures rose 2.8% (2.6% y/y), adding 1.91 percentage points to Q3 growth.
Haver
January 25, 2024
New single-family home sales rose 8.0% (4.4% y/y) during December to 664,000 units (SAAR) after falling 9.0% to 615,000 in November. The Action Economics Forecast Survey expected sales of 650,000. The median price of a new home fell 3.0% in December (-13.8% y/y) to $413,200 during December from $426,000 in November.
Haver
January 26, 2024
The Pending Home Sales Index jumped 8.3% m/m to 77.3 in December after drops of 0.3% in November and 1.2% in October. The year-on-year rate was 1.3% in December, an improvement from -5.4% in November and -33.9% in December 2022. Nevertheless, the PHSI had fallen 39.6% since its August 2020 high of 128.0; it fell 16.1% in 2023.
Haver
January 26, 2024
The PCE price index rose 0.2% (2.6% y/y) in December after easing 0.1% in November. The index excluding food and energy prices increased 0.2% (2.9% y/y) following two straight 0.1% gains. Goods prices fell 0.2% last month (unchanged y/y), the third straight month of decline. Services prices rose 0.3% (3.9% y/y), the same as in November.
Financial Times
January 25, 2024
The European Central Bank kept its deposit rate unchanged for the third meeting in a row, leaving it at a record high of 4%. “The incoming information has broadly confirmed its previous assessment of the medium-term inflation outlook,” the Governing Council said in a statement. The ECB also maintained it would hold rates at “sufficiently restrictive levels for as long as necessary.”
January 26, 2024
Capital Economics
Large-scale liquidity injections have had little impact on economic activity recently and the upcoming RRR cut is likely to be no different. Quantitative monetary policy tools are ineffectual in an environment of weak credit demand. And with the PBOC unwilling to slash interest rates, that leaves the burden of supporting growth on fiscal policy.
Nikkei Asian Review, Reuters
January 23, 2024, January 23, 2024
The Bank of Japan held its short- and long-term rate targets in negative territory, maintaining its ultra-easy monetary policy. The move was widely anticipated as policymakers deliberate on whether wage increases will rise enough to keep inflation at the 2% target. The market expects the BOJ to end negative rates at some point this year, with a Reuters poll predicting the reversal in April.
Oxford Economics
January 25, 2024
If the Fed wants to pull off a soft landing, it will need to ease monetary policy this year. We expect them to have enough confidence to begin cutting interest rates at their late April/early May meeting, though the backdrop of a strong economy means they are likely to cut rates only gradually this year.
Bloomberg
January 29, 2024
The US Treasury reduced its estimate for federal borrowing for the current quarter, a move unexpected by many dealers. The Treasury Department said that it now estimates $760 billion in net borrowing for January-through-March, down from a previous prediction of $816 billion released in late October.