20 Mar 2015
US activity data to stage a rebound, June hike remains on the table – ING
FXStreet (Barcelona) - While retail sales, manufacturing production and housing starts have been depressed by the weather, other US indicators look in healthy shape, as such June rate hike is still on the cards, notes James Knightley, Senior Economist at ING.
Key Quotes
“It is looking a struggle for the US economy to achieve 1% GDP growth in 1Q15. Exports, retail sales and manufacturing production have fallen for three consecutive months, housing starts fell 17% in February and auto sales are down too.”
“However, we believe that bad weather and disruption at the West Coast ports are responsible for much of the weakness.”
“These depressing factors have now ended and we are hopeful that the growth story will return more positively.”
“Yesterday’s initial jobless claims numbers suggest that the labour market remains in healthy shape. Admittedly firms tend to slow hiring before laying off people, but the JOLTS data from last week suggested that firms are still hiring in decent numbers.”
“Meanwhile, the leading index continues to point to strong growth more broadly in the economy.”
“With the latest fall in bond yields helping to drag down mortgage rates and with households continuing to benefit from low energy costs, we still look for a strong rebound in the US activity data.”
“As such, a June rate hike from the Fed remains on the table in our view.”
Key Quotes
“It is looking a struggle for the US economy to achieve 1% GDP growth in 1Q15. Exports, retail sales and manufacturing production have fallen for three consecutive months, housing starts fell 17% in February and auto sales are down too.”
“However, we believe that bad weather and disruption at the West Coast ports are responsible for much of the weakness.”
“These depressing factors have now ended and we are hopeful that the growth story will return more positively.”
“Yesterday’s initial jobless claims numbers suggest that the labour market remains in healthy shape. Admittedly firms tend to slow hiring before laying off people, but the JOLTS data from last week suggested that firms are still hiring in decent numbers.”
“Meanwhile, the leading index continues to point to strong growth more broadly in the economy.”
“With the latest fall in bond yields helping to drag down mortgage rates and with households continuing to benefit from low energy costs, we still look for a strong rebound in the US activity data.”
“As such, a June rate hike from the Fed remains on the table in our view.”