QUICK QUILL — Three bearish fundamental narratives on labor, margins and capex were on display in Tuesday’s U.S. economic docket. Moreover, Conference Board Fewer Jobs now concurs with the University of Michigan’s Higher Employment Expectations – both have reached a critical juncture for the future path of Fed rate policy. The sole missing link to convince investors that the Fed is behind the 8 ball is hard evidence that bears out what households are experiencing on the ground.
TAKEAWAYS
- Conference Board Fewer Jobs rose for a fifth month to 28.5, a streak seen in every recession from the 1970s to the GFC; Pennsylvania’s consumer expectations are down 55 points YTD, tracking with Philly Fed Non-Mfg Employment contracting for the first time since August
- Conference Board Income Expectations fell 5.2 points in March to 0.8, flagging downside for Real Personal Income Less Transfers from January’s 1.5% YoY; impaired purchasing power corroborates the margin squeeze evident in the Richmond Fed’s March services data
- The aggregate of Philly and Richmond Fed gauges for equipment and software expenditures came in at just 0.1 in March; the -7.0 point MoM decline is the biggest in nine years and suggests the rundown in Real Equipment & Software Investment since 2023 will persist