US Economy: Fogginess Continues - ANZ
According to ANZ Research Team, the health of the US economy remains
unclear, noting that it would take quite strong results in upcoming
economic data for the market to get excited about the possibility of a
June rate hike.
"For those waiting to get a clearer picture on the state of the US economy, particularly those trying to predict when the Fed will next shift policy, frustration may be something that is starting to creep in. While the labour market is reasonably healthy, activity data has certainly presented more of a clouded picture. This was highlighted in the Fed’s statement last week and Friday’s string of data continued that theme."
"Despite the reasonable labour market, US consumers remained hesitant to open their wallets, with the saving rate lifting to the highest since February 2015 and sentiment falling to a seven month low. Not only this, but the Chicago PMI also undershot expectations, and it of course all comes after the soft Q1 GDP report last week."
"The activity data is far from terrible, but it is hardly providing a strong signal of momentum and one would have to think that these mixed signals will keep the FOMC relatively cautious about rushing into any further policy tightening."
"Of course most would agree that the US economy is still in far better shape overall, but the recent softness has many mindful, and means there is now a huge focus on this week’s US payrolls and next week’s retail sales data."
"It looks as though it would take quite strong results for the market to get excited about the possibility of a June rate hike."