2 Feb 2015
US data ahead to push back against the dovish outlook for the economy – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team lists and reviews three pieces of key data releases ahead which is likely to push bang against the dovish shift for US economic growth.
Key Quotes
“First, US auto sales are expected to ease on a serial basis, but at the consensus 16.6 mln unit pace, they will still be above last year's average. Despite the disappointing December retail sales, the real message is that household consumption rose by 4.3% in Q4, the fastest since Q1 06, and without much use of revolving credit (credit cards).”
“Second, the US reports December trade figures. Even though the government provides an estimate of Q4 GDP, not all the data have been reported. That is why the first estimate is subject to statistically significant revisions. [..] the consensus expects a December trade deficit of $38 bln, which would be the smallest monthly shortfall in 2014 and will likely prompt revisions in the GDP estimate.”
“Third, the January employment data are expected to extend the streak of more than 200k net new jobs being created. Weekly initial jobless claims recorded new cyclical lows after the survey week (265k). The December decline in hourly earnings will likely be reversed. This is not to say wage growth in the US is strong; it is just not as weak as the December report implied.”
“In addition, many economists have begun arguing that the pent-up wage cuts that could not be delivered during the crisis have been now absorbed via smaller increases during the recovery.”
Key Quotes
“First, US auto sales are expected to ease on a serial basis, but at the consensus 16.6 mln unit pace, they will still be above last year's average. Despite the disappointing December retail sales, the real message is that household consumption rose by 4.3% in Q4, the fastest since Q1 06, and without much use of revolving credit (credit cards).”
“Second, the US reports December trade figures. Even though the government provides an estimate of Q4 GDP, not all the data have been reported. That is why the first estimate is subject to statistically significant revisions. [..] the consensus expects a December trade deficit of $38 bln, which would be the smallest monthly shortfall in 2014 and will likely prompt revisions in the GDP estimate.”
“Third, the January employment data are expected to extend the streak of more than 200k net new jobs being created. Weekly initial jobless claims recorded new cyclical lows after the survey week (265k). The December decline in hourly earnings will likely be reversed. This is not to say wage growth in the US is strong; it is just not as weak as the December report implied.”
“In addition, many economists have begun arguing that the pent-up wage cuts that could not be delivered during the crisis have been now absorbed via smaller increases during the recovery.”