Daily Archives: Feb 12, 2016 at 10:06 am EST

No Sign Of Recession In US Retail Spending Data In January

US retail sales rose a moderate 0.2% in January, the Census Bureau reports. The gain offers another clue for thinking that the stock market’s plunge this year may be a false warning about the near-term macro outlook. In fact, when you look at retail spending’s year-over-year rate, today’s release shows a modest acceleration in the trend. To be fair, the early data for the January economic profile had been previously hinting at the probability that this year’s first month would escape the clutches of an NBER-defined recession. Today’s report strengthens that view. February, of course, remains a mystery in terms of the available hard data at this point. Meanwhile, reviewing a broad set of indicators that reflects activity through last month—excluding market data—still aligns with an assumption that US economic growth will roll on.
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Philly Fed ADS Index: No Recession

The battle between macro and markets rages on. Yesterday’s update of the ADS Index—a US business-cycle metric published by the Philadelphia Fed—remained comfortably in growth territory, in part due to yesterday’s upbeat report on jobless claims (one of the index’s six components). A markets-based estimate of the US economic trend, by contrast, continues to price in a new recession, based on the Macro-Markets Risk Index (MMRI), which aggregates four corners of the financial and commodities realm in an effort to gauge the crowd’s outlook. (See here for MMRI’s design details.)
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Initial Guidance | 12 February 2016

● US jobless claims fall to lowest level in 7 weeks | Bloomberg
● US Consumer Comfort Index holds close to a 3-mo high | Bloomberg
● Fed won’t backpedal on interest rates, Janet Yellen says | NY Times
● Yellen: Negative rates not “off the table” | USA Today
● Sweden cuts rates deeper into negative territory | Reuters
● Eurozone GDP rises 0.3% Q3, matching Q4’s pace | MarketWatch
● German economy ends 2015 on solid note | DW