GlobalThere has been little to dislodge the growing conviction in financial markets about soft landing scenarios over the past few days as data calendars have been thin and policymakers have been relatively quiet. Investors have, therefore, taken their cue from the dataflow that’s been released over the past month suggesting that inflationary pressures are cooling and that further interest rate hikes could now be unnecessary (see charts 1 and 2). We use this opportunity, therefore, to focus this week on some longer-term issues that could potentially generate heightened economic and financial instability in the period ahead. Uncertainty about the economic outlook certainly seems to have been much higher over the past 10 years compared with the norms in prior decades (chart 3). Moreover, the rapid advance – and adoption – of new technology (chart 4), demographic shifts (chart 5) and climate change (chart 6), could intensify this uncertainty in the period ahead.
USA| Nov 22 2023U.S. Durable Goods Orders Fall Sharply in October
- Aircraft orders plunge; orders outside transportation hold steady.
- Both durable & nondurable shipments slide.
- Order backlogs & inventories increase.
by:Tom Moeller
|in:Economy in Brief
USA| Nov 22 2023U.S. Jobless Claims Less than Expected in Nov. 18 Week
- Initial claims in latest week down 24,000 from previous week.
- Continuing claims still high, but down from previous week.
- Insured unemployment rate holds at 1.2% for a seventh week.
- Purchase applications rise for the third consecutive week; applications for loan refinancing up for the fourth week in five.
- Effective interest rates drop for all types of mortgages except 5-year ARM.
- The average size of a mortgage loan falls for the fifth week in six.
United Kingdom| Nov 22 2023U.K. Industrial Orders Plunge
U.K. industrial orders fell to -35 in November from -26 in October. The three-month average of the series is -26, weaker than its -20 6-month average and its -18 12-month average. Conditions in industry continue to deteriorate. The queue standing on data back to 1991 has orders weaker only 11.7% of the time. This is a weak headline for the CBI survey.
Export orders and the look-ahead to the next three months for output volume both weakened in November. Export orders fell to -31 in November from -23 in October. The outlook for output volume fell to -7 in November from +15 in October. Both export orders and the outlook for volume show ongoing worsening in their sequential averages.
However, price expectations are rising to +11 in November from +7 in October. That is still below September’s +14. And sequential averages from 12-months to 3-months show that diminished expected prices pressures have, up to this point, ruled the roost. Manufacturing output readings that lag by two months show progressive weakness, with output falling at a 7.1% annual rate over three months. Among the price expectations, manufacturing output trends, and volume expectations, there is evidence of weakening and of lingering inflation pressures. Prices have a 65.8 percentile standing, above their historic median. And despite its recent weakness, the year-on-year growth in manufacturing output has a 60-percentile standing, above its historic median. Some of the signals on growth and inflation remain mixed. Still, there is clear evidence of weakening in progress.
USA| Nov 21 2023U.S. Existing Home Sales Fall Sharply in October
- Sales weaken to 13-year low.
- Home prices slip again.
- Purchases decline in most regions of country.
by:Tom Moeller
|in:Economy in Brief
USA| Nov 21 2023Chicago Fed National Activity Index Fell in October
- The monthly index fell to -0.49 in October with the 3-month average falling to -0.22.
- This indicates that the economy grew slower than its longer-term trend.
- All four major categories made negative contributions.
- However, the October value is still well above the -0.70 value that historically has been associated with recession.
by:Sandy Batten
|in:Economy in Brief
USA| Nov 21 2023U.S. Energy Prices Weaken
- Gasoline & diesel fuel prices continue to fall.
- Crude oil prices weaken further.
- Natural gas prices increase.
by:Tom Moeller
|in:Economy in Brief
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