While unemployment remains historically low, job growth is suddenly slowing, reflecting the negative trends in many sectors being impacted by trade and growing uncertainty. This quarter is seeing weaker consumer spending and business investment, which will no doubt lead to weaker economic growth. The Fed may take pre-emptive measures in July and cut rates Job … Continued
Roller-coaster consumer sentiment rebounded in May as did consumer spending, while the uncertainty around trade intensified. Economy slows: Economic growth in Q1 was revised down slightly, but most importantly growth is poised to be much weaker in Q2 as much of the gain reported for Q1 will be reversed in Q2. Consumer spending down: Consumer spending declined … Continued
New home construction and new home sale have been a plus, but manufacturing is in decline against the backdrop of possibly prolonged trade drama with China. Housing positive:New home construction and new home sales are the primary positive trends so far this quarter, as lower mortgage rates are leading to the highest pace of new … Continued
New auto tariffs on Europe and Japan were postponed while tariffs on steel and aluminum from Canada and Mexico were lifted, eliminating some uncertainty but not all. Retail sales remain weak, pointing to a softer economy, but housing and interest rates, which fell, appear less of a drag. Still, auto loan rates are high. Tariffs: … Continued
The White House today in a statement confirmed that it will delay by up to six months any decision on Section 232 tariffs on autos and auto parts. This is exactly the route we expected, as the Trump Administration uses the threat of high tariffs as a preferred tool for leverage. How this journey ends is still … Continued
First-quarter economic growth blew away estimates and reversed a downward trend of the past couple of quarters, but beneath the headlines, consumer spending and business investment growth are weakening. Growth improves: First-quarter real GDP growth was much better than expected at 3.2%, but it wasn’t a result of consumer spending or business investment. A build-up of … Continued
Most of the latest economic data point to improving trends relative to a weak start to the year. Pending home sales and new home sales in March suggest housing activity will be stronger in Q2 and possibly better than last year aided by mortgage rates that are now lower than last year. Unemployment fell to … Continued
First-quarter economic growth blew away estimates and reversed a downward trend of the past couple of quarters, but beneath the headlines, consumer spending and business investment growth are weakening. Growth improves: First-quarter real GDP growth was much better than expected at 3.2%, but it wasn’t a result of consumer spending or business investment. A build-up … Continued
Contrasts are the theme. Improving retail sales contrasts with residential construction weakness. Economic growth is decelerating but could pick up if consumers start spending again. Consumer credit is supportive of that spending, but rising defaults on credit cards and higher delinquency on subprime auto loans could spell trouble. Meantime, trade concerns cast a shadow over … Continued
We now know from the IRS statistics that tax refunds have indeed been lower this year as we had feared would be the case. Total refunds are down 1.5% in number and down 2.6% in dollar amount through April 5. The decline amounts to $6 billion less being pumped into consumers’ pockets. The average refund … Continued
