US: Key Economic Releases Review - Nomura
Research Team at Nomura, reviews the key economic data releases overnight from the US.
Key Quotes
“The advanced goods trade deficit widened somewhat more than anticipated to $62.9bn in February (Consensus: $62.2bn) from a revised $62.4bn in January. Both imports and exports increased in February. On a real basis, the increase in imports likely outpaced the increase in exports, suggesting a wider trade deficit.
Personal income and spending: Personal income increased by 0.2% m-o-m in February, above expectations (Nomura and Consensus: 0.1%) while spending increased by 0.1% in February, in line with market expectations but above ours (Nomura: -0.1%, Consensus: +0.1%) following a revised 0.1% increase in January (previously reported as 0.5%). On real terms, personal spending rose by 0.2% as core inflation was somewhat weaker than anticipated. But the bigger news was spending being revised down sharply in January, which pushed the real spending figure down to flat from a 0.4% increase previously.
PCE inflation: The headline PCE deflator came in line with expectations declining 0.1% m-o-m (-0.106% unrounded) in February (Consensus and Nomura: +0.1% m-o-m). Core inflation came in below expectations at 0.1% m-o-m (Consensus and Nomura: 0.2%) but on an unrounded basis, it increased 0.149%, somewhat closer to expectations than the rounded figure suggests.
On the details, durable goods prices declined 0.26% m-o-m following an unexpected 0.11% m-o-m increase in January, which indeed turned out to be transitory. On service prices, there was a sharp slowdown in financial service and insurance prices in February of -0.24% m-o-m after three consecutive months of gains.
Pending homes sales increased by 3.5% m-o-m in February, above Consensus expectations for a 1.2% increase, and a solid bounce back from a 3.0% decline in January.
Q1 GDP tracking update: The advance goods trade report for February showed that imports and exports both increased in February. On a real basis, the increase in imports outpaced the increase in exports, suggesting a wider trade deficit and negative for Q1 growth. In sum, taking the new data into account, we revised down our Q1 GDP tracking estimate by 0.4pp to 0.7% from 1.1% previously.”
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