10 Things You Need To Know: January 31, 2023
Key data releases this week include: employment cost index (Tue), FHFA Housing Price Index (Tue), consumer confidence (Tue), ISM Manufacturing Index (Wed), JOLTS Jobs Openings (Wed), FOMC rate decision (Wed), factory orders (Thu), ISM Services Index (Fri), and nonfarm payrolls (Fri).
Bloomberg
January 23, 2023
The Conference Board’s leading economic index fell 1% in Dec., which was below estimates for a -0.7% decline. There was widespread weakness among leading indicators in December, indicating deteriorating conditions for labor markets, manufacturing, housing construction, and financial markets in the months ahead.
Trading Economics
January 26, 2023
The US economy expanded an annualized 2.9% on quarter in Q4 2022, following a 3.2% jump in Q3 and beating forecasts of 2.6%. Consumer spending rose 2.1%, below 2.3% in Q3 and forecasts of a 2.5% increase. Residential investment continued to contract (-26.7% vs -27.1%), led by new single-family construction and brokers’ commissions. Considering full 2022, the GDP expanded 2.1%.
Trading Economics
January 27, 2023
Personal spending in the US dropped 0.2% month-over-month in December of 2022, worse than market forecasts of a 0.1% fall, and following a revised 0.1% decline in November. High-interest rates and rise in inflation levels started to impact consumer behavior.
Trading Economics
January 27, 2023
Pending home sales in the US unexpectedly rose 2.5% month-over-month in December of 2022, the first rise since May, and beating market forecasts of a 0.9% drop.
Financial Times
January 26, 2023
Sudden changes to Japan’s ultra-loose monetary policies could have a significant impact on global financial markets, the International Monetary Fund has warned. IMF deputy managing director Gita Gopinath urged the Bank of Japan to be flexible in how it controls government bond yields. “We still believe that it’s important for monetary policy to remain highly accommodative at this point. Yield curve control is a part of that toolkit,” Gopinath said.
Barron’s
January 30, 2023
If the FOMC’s statement speaks of “ongoing” rate hikes, that will serve as a clue to the central bank’s thinking about future rates. Alternatively, the statement could emphasize that policy will become data dependent. If so, economic releases, such as the jobs report due Friday morning and subsequent inflation readings, will take on even greater import.
Barron’s
January 30, 2023
Gasoline prices have risen 41 cents a gallon in the past month to an average national price of $3.51. Summer driving could be pricier than many expect, though it’s unlikely to be as bad as last year, when prices hit $5. The biggest source of the increase, and the biggest beneficiaries, are refineries that turn crude oil into fuels.
Barron’s
January 30, 2023
The growth of M2—a measure that includes currency in circulation, balances in retail money-market funds, savings deposits, and more—had been slowing over the last two years. In December, the growth rate went negative by 1.3% versus a year earlier, marking the first-ever decline since the Fed started publishing M2 data in 1959. M2’s recent peak in February 2021 was 27%. M2 is still 37% higher than it was pre-pandemic, despite the deceleration.
Oxford Economics
January 27, 2023
The latest data offer among the first tangible signs that the economy’s main engine is slowing. Looking ahead, a cooling labor market, a depleted savings cushion, and less willingness to rely on credit cards in a high inflation environment will lead consumers to pull back.