Weak Retail Spending In December Weighs On US Q4 GDP Outlook

The unexpected drop in retail sales in December has raised uncertainty about the upcoming report on fourth-quarter gross domestic product (GDP). Prior to yesterday’s update on consumer spending for the final month of 2018 most estimates of the Q4 economic activity reflected moderate growth in the mid-to-high 2% range. But the St. Louis Fed’s GDPNow model slashed the Q4 outlook to a sluggish 1.5% after the release of retail sales data. That GDP estimate is an outlier on the downside at the moment. The question is whether nowcasts from other sources will fall in the days ahead as the latest retail data factors into the calculus?
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Macro Briefing: 15 February 2019

Congress sends legislation to Trump to avoid shutdown: Bloomberg
Legal challenges await Trump’s decision to call a nat’l emergency: Reuters
US-China trade talks set to continue, but no deal so far: SCMP
As federal debt rises to record, politicians are mum: NY Times
China’s banks lend record amount in Jan in bid to stimulate economy: Reuters
Amazon cancels plans to build a New York City headquarters: WSJ
US jobless claims rose last week, remaining at relatively elevated level: Bloomberg
Business inventories in US slipped in November: MW
Producer price index for US fell for a second month in January: Reuters
US retail spending fell sharply in December–biggest slide in over 9 years: CNBC

Macro Briefing: 14 February 2019

Washington waits to see if Trump will sign law and avert gov’t shutdown: CNN
Trump considering 60-day extension for China tariff deadline: CNBC
Germany’s economic performance was flat in 2018’s Q4: Bloomberg
China reports better-than-expected news on trade data for Jan: CNBC
House passes bill to end US support of Saudi Arabria’s war in Yemen: The Hill
Business inflation expectations in Feb eased to 1.9%: Atlanta Fed
Headline consumer inflation slowed to a 1.6% annual pace for US in Jan: MW

Macro Briefing: 13 February 2019

Trump considers delay on China tariffs set for March 2: CNBC
China’s President Xi to meet US trade officials on Friday: SCMP
Trump will agree to spending plan to avert shutdown… maybe: Politico
Fed Chair Powell: US economy remains “strong”: MNI
Eurozone industrial output’s slide accelerated in December: Reuters
Rising global oil supply on track to outpace demand in 2019: Reuters
UK inflation fell to 2-year low in January: Reuters
Small US business optimism fell to lowest level since late-2016: NFIB
US job openings rise to record high (since 2000) in Dec: CNBC

Macro Briefing: 12 February 2019

Congressional legislators announce deal to avert gov’t shutdown: Politico
Will Trump accept less than he’s demanded for border wall? Bloomberg
Upbeat outlook on trade supports market sentiment: Reuters
China’s economic slowdown is modest but widespread: WSJ
Proxy voting records: big money managers favor short-term corp proposals: II
The evidence is weak in favor of factor timing for equity investing: ETF.com
The idea of a Federal wealth tax is topical, but is it constitutional? New York
Wall Street analysts have been cutting corporate earnings projections: NY Times

Macro Briefing: 11 February 2019

US gov’t shutdown risk rises as budget talks break down: Reuters
IMF’s new chief economist supports Fed’s pause on rate hikes: FT
Trump’s NAFTA replacement faces challenges in Congress: Axios
US dollar near 6-week high amid worries over global growth: CNBC
Krugman: global recession risk is rising: CNBC
Japan’s Q4 GDP expected to post modest growth: MNI
Delayed US GDP report for Q4 rescheduled for Feb 28: BEA
US warships again challenge China’s claims in South China Sea: CNN
Pompeo heads to Central Europe to counter Russia and China’s sway: Politico
UK economy contracted in Dec under Brexit strain: Bloomberg