10 Things You Need to Know: May 7, 2024
Key data releases this week include: consumer credit (Tue) and consumer sentiment (Fri).
Haver
May 3, 2024
Nonfarm payrolls increased 175,000 (1.8% y/y) in April after rising 315,000 in March, revised from 303,000, and 236,000 in February, revised from 270,000. Expectations had been for a 250,000 rise in the Action Economics Forecast Survey. The three-month average change of 242,000 is the slowest since December of last year. Average hourly earnings increased 0.2% in April after an unrevised 0.3% March gain.
Haver
April 30, 2024
. U.S. house prices rose 1.2% m/m in February following a 0.1% easing in January (unrevised) and a 0.2% increase in December (+0.1% previously), according to the Federal Housing Finance Agency (FHFA) House Price Index. The February reading was the 17th m/m gain in 18 months and the largest since April 2022. The year-on-year rate of increase accelerated to 7.0% in February, the highest since November 2022.
Haver
May 1, 2024
The ISM U.S. manufacturing PMI fell to 49.2 in April after rising to 50.3 in March. The April manufacturing PMI indicated that the U.S. manufacturing sector contracted for the 17th time in 18 months. A reading of 50.0 had been expected in the Action Economics Forecast Survey for April.
Trading Economics
May 3, 2024
The ISM Services PMI in the US dropped sharply to 49.4 in April of 2024 from 51.4 in the earlier month, reflecting the first contraction in services sector activity since December of 2022, and surprising market expectations of 52. It was only the second decline in activity since the pandemic-driven crash in the second quarter of 2020.
Capital Economics
May 3, 2024
Data released this week showed that euro-zone services inflation fell in April for the first time in five months. We think that the continued pass-through of lower energy costs and slower wage growth will mean that it keeps falling over the rest of the year, allowing the ECB to cut interest rates more quickly than is discounted in the market.
Bloomberg
May 5, 2024
US Treasury Secretary Janet Yellen recognized the yen “did move quite a bit in a relatively short period of time” but added she was “not going to comment” on whether Japan had intervened to boost the currency, adding she thought that was “a rumor.” “We would expect these interventions to be rare and consultation to take place,” Yellen said, after Japanese authorities reportedly boosted the yen on two occasions over the last week.
Barron’s
May 6, 2024
More than three-quarters of S&P 500 index companies have reported first-quarter results, with 77% having beaten earnings estimates, roughly 10 percentage points better than normal. Nearly 60 more companies are on tap for this week.
Barron’s
May 6, 2024
By Friday’s close, markets had priced in two one-quarter percentage-point cuts in the Fed’s key policy rate this year, up from just a single reduction by the end of the year previously. Federal-funds futures put a 91.2% probability of an initial cut at the mid-September FOMC meeting. A second quarter-point reduction in December has an 82.9% chance.
Capital Economics
May 1, 2024
Fed Chair Jerome Powell argued in his post-FOMC press conference that, despite the stickiness of inflation in recent months, additional interest rate hikes were still “unlikely”. Moreover, while he admitted that the strong start to the year means it will “likely to take longer to gain the confidence” that inflation was moving down to a sustained 2% pace, he was careful not to rule out rate cuts later this year either.