2.1% expected) for the first time in four months and business investment continued to soften, reflecting a slower U.S. Orders for durable, or long-lasting, goods fell in February (-1.6% vs.Recall that at the top of an economic cycle the inventory/sales ratio tends to spike higher and demand cools off before companies cut back production. The ratio of inventories to sales edged up to 1.39 from 1.38. Business inventories rose 0.8% in January, the second month in a row stockpiles grew at that rate.Construction spending climbed 1% in February following a revised 2.5% gain in January, suggesting a rebound in early 2019 after a bout of weakness toward the end of last year.There is nothing in the details of the data or the comments to make us think that the expansion is going to come to an end anytime soon. manufacturing industries surveyed by ISM expanded in March. The index for new orders jumped 1.9 points to 57.4%, while production rose 1 point to 55.8%. The ISM said its manufacturing index rose to 55.3% last month from 54.2% in February.
Retail sales dropped 0.2% last month (vs +0.3% expected), hurt in part by a severe cold spell across the country. retailers fell in February for the second time in three months in another sign of a slowdown infecting broad swaths of the economy early in the new year. The bond market will price in higher inflation and the Fed will likely not be able to maintain its dovish outlook should wage inflation show up in the PCE measure.Įlsewhere, U.S. This is good short-term for the economy, but longer-term inflationary pressures will mount. Salaries are trending higher as the labour market tightens. The figure below shows that the unemployment rate has likely gotten as low as it will go for this expansion. The Friday post-jobs report close on the equity indexes left the majors (S&P 500, Nasdaq) a stone’s throw from the 2018 all-time record highs. Jobs are a lagging economic indicator, but in an equity bull run good numbers only further fuel buying. January job gains were little changed at 312,000. The increase in jobs in February was revised up to 33,000 from 20,000. The increase exceeded the 179,000 forecast of economists. created 196,000 new jobs last month after a swoon in February. The macroeconomic news this week was highlighted by the Non-Farm Payrolls Report which showed that the U.S. The more investors fall into disbelief over how long this V-shaped recovery is persisting, the higher the trading algos seem to want to push equity prices. indexes about 2% from all-time record highs. This past Friday close brought the major U.S.
As soon as the date of the summit between Trump and Chinese president Xi Jinping is announced, we’ll begin the countdown to the end of the “Trade War rally”. The White House said on Friday after three days of trade talks with Chinese officials in Washington that the negotiations made progress on numerous key issues but significant work remains. Markets continued to rally this past week in a “buy the rumour” anticipation of an announcement of a U.S.-China trade deal.
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