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April US business inventories +0.1% vs +0.2% expected


April US business inventory data

  • The March reading was +0.4% (revised to +0.3%)
  • Business sales +0.9% vs +0.2% prior (largest since Feb 2014)
  • Inventory-to-sales ratio 1.40 months vs 1.41 months prior
  • Inventories ex-autos -0.2% (largest drop in nearly a year)

The small rise in inventories will be a small hit to GDP estimates but the jump in sales will boost growth and inventories in May, June and beyond.

Inventories have been a drag on growth for the past three quarters but still remain relatively high.

 

May 2016 US industrial production -0.4% vs -0.2% exp


May 2016 US industrial production and manufacturing output data report 15 June 2016

  • Prior 0.7%. Revised to 0.6%
  • Capacity utilisation 74.9% vs 75.2 exp. Prior 75.4% prior. Revised to 75.3%
  • Manufacturing output -0.4% vs 0.0% exp. Prior 0.3%. Revised to 0.2%

Far from inspiring numbers. The Cap U continues to drop, it was 76.4% this time last year. Only the mining industry made a gain this month. It all makes last month's gains a one off.

 

Federal Reserve leaves interest rates unchanged - highlights of June 15, 2016 statement


Highlights of the FOMC interest rate decision June 15, 2016

  • Rates left unchanged in 0.25% to 0.50% range   
  • Labor market slowed since April meeting despite economic pickup
  • Expects labor market indicators 'will strengthen'   
  • Repeats that economy to warrant only gradual hikes
 

US May CPI +0.2% m/m vs +0.3% exp

US CPI data highlights:

  • Prior was +0.4% m/m
  • CPI ex food and energy +0.2% vs +0.2% m/m exp
  • CPI +1.0% y/y vs +1.1% exp
  • CPI ex food and energy +2.2% y/y vs +2.2% exp
  • Prior ex food and energy +2.1% y/y

One notable comment from Yellen in the press conference yesterday was that she expected core inflation to rise to 2% in 2-3 years. That's measuring with the PCE index, which has diverged from CPI. Either way, that's a long timeline for hitting the Fed target.

source

 

May 2016 US housing starts 1.164m vs 1.150m exp

Details of the May 2016 US housing starts and building permits data report 17 June 2016

  • Prior 1.172m. Revised to 1.167m
  • Building permits 1.138m vs 1.150m exp. Prior 1.130m

Starts don't drop as much as expected and permits miss but gain from last month.  Single family homes form the biggest part of housing and that rose 0.3%.

In the real world this report isn't anything bad but in this world of Fed data watching they'd want to see it keep gaining. They don't have the luxury to see falling numbers in any sector.

source

 

US initial jobless claims 259K vs 270K expected

Weekly initial jobless claims

  • Prior 277K (unrevised)
  • Continuing claims +2142K vs 2150K exp
  • Prior continuing claims 2162K
 

Markit US manufacturing June prelim 51.4 vs 50.9 expected

The June PMI from Markit

  • Prior was 50.7 (a series low)
  • Estimates ranged from 49.9 from 52.0
  • Output 50.9 vs 49.4 prior
  • Employment 51.0 vs 51.3 prior
  • The full report
 

May 2016 US durable goods orders -2.2% vs -0.5% exp m/m

US durable goods for May 2016

  • Prior 3.4%. Revised to 3.3%
  • Ex-transport -0.3% vs 0.1% exp. Prior 0.5%
  • Ex-defense -0.9% vs 3.8%, Prior. Revised to 3.7%
  • Cap goods orders non-def ex-air -0.7% vs 0.4% exp. Prior -0.6%, Revised to -0.4%
  • Cap goods shipments non-def ex-air -0.5% vs 0.3% exp. Prior 0.4%. Revised to 0.6%

Shock horror, another durable goods report all over the place. A lot of the time this report is one step forward, two steps back.

 

US Market Insight: Summer Storm Brewing Over Atlantic

Economic data are likely to be relegated to a supporting role as policymakers and investors continue to discuss the implications Brexit, at least for a while.

As a result, markets are likely to focus on central bankers and their responses to UK voters' decision to leave the European Union.

On Wednesday, the Forum on Central Banking, hosted by the European Central Bank (ECB) in Linho Sintra, Portugal will line up all the big name bankers. Federal Reserve (Fed) Chair Janet Yellen and Bank of England Governor Mark Carney are scheduled to make appearances, alongside their host, ECB President Mario Draghi.

The key question there is, what can central banks can do to contain downside risks to the global economy at a time when much of their arsenal has already been used up?

Any potential disturbance from Brexit will take time to show up in the economic data. Measures of sentiment are likely to be the first to show how businesses and consumers are reacting to the new sources of uncertainty.

 

Q1 2016 US GDP final 1.1% vs 1.0% exp q/q ann

Details of the final Q1 2016 US GDP data report 28 June 2016

  • Q4 2015 1.4%
  • Personal consumption 1.5% vs 2.0% exp. Prior 1.9%. Q4 2015 2.4%
  • Core PCE 2.0% vs 2.1% exp. Prior 2.1%
  • PCE 0.2% vs 0.3% exp. Prior 0.3%
  • GDP price index 0.4% vs 0.6% exp. Prior 0.6%
  • GDP sales 1.3% vs 1.2% exp. Prior 1.0%
  • Q1 corporate profits revised to 2.2% vs 0.6% exp. Prior 0.6%
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    US May core PCE 1.6% y/y vs 1.6% expected

    The inflation data in the personal income and spending report

    • Prior core PCE 1.6% y/y
    • Core PCE +0.2% vs +0.2% m/m exp
    • PCE deflator +0.9% y/y vs +1.0% exp
    • PCE deflator +0.2% m/m vs +0.2% exp
    • No revisions to prior inflation data
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