Consumer Discretionary Caution Maintained Amid Real Purchasing Power Loss and Worse-Than-Expected Household Stress
QUICK QUILL — Hey, NBER, the real loss in household purchasing power from your business cycle indicator -- Real Personal Income Less Transfers, raises a red recession flag. The revised depletion in personal savings relative to…
Margin Squeeze on Labor Pops Up in Richmond and Dallas
QUICK QUILL — ADP’s weekly employment improvement coincided with the shift in Fed rate expectations over the last few months, while Richmond Fed’s Services Prices Received index has done little to change the elevated view for…
Slower Industrial Activity and Demand-Side Disinflation Offsetting Geopolitical Supply-Side Inflation
QUICK QUILL — Industrial production more than accounted for upside in the Chicago Fed National Activity Index, but the Dallas Fed’s Future Inventories gauge suggests the good news is unlikely to last and slower industrial output…
Deflationary Mindset Trumps Any Whiff of Inflation Psychology
QUICK QUILL — Inflation psychology is absent for big-ticket purchases like autos, homes and household durables. That doesn’t diminish households’ fear for longer-run prices rising outside of gasoline, especially in the context of the widespread inflation hit to…
Upstream Chemical Vulnerability Spells Higher Recession Risk for Germany
QUICK QUILL — The collapse in Philly Fed manufacturing suggests upstream, demand-led price pressures are not developing as the supply chain shifts from pull-ahead to payback. Ongoing weakness in Backlogs and emerging declines in Employment add…
Favor Staples over Discretionary
QUICK QUILL — Inflation concerns were already high on rates traders’ worry wall in April. Now the trucking market is adding upside risk in May. As Fed Minutes showed policymakers pondering the potential for tightening,…
Home Sales and Remodeling Cycles at Risk
QUICK QUILL — Higher bond yields couldn’t have come at a worse time for Pending Home Sales that appeared to have gained traction over the last few months. Higher mortgage rates and elevated mortgage application…
Margin Squeeze Continues on Service Sector and Home Builders
QUICK QUILL — The margin squeeze narrative was on full display in May’s New York Fed Services survey. Businesses in America’s service hub are controlling what they can by keeping a lid on labor costs,…
Rent The Rally in Industrial Fundamentals
QUICK QUILL — Breaking down all parts of the May Empire Manufacturing Survey revealed a pull-ahead theme on display. Delivery times, especially, are facing a supply-side driven bulge that are not confirmed by the broader…
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