small rise in inventories will be a small hit to GDP estimates but the
jump in sales will boost growth and inventories in May, June and beyond.
Inventories have been a drag on growth for the past three quarters but still remain relatively high.
from inspiring numbers. The Cap U continues to drop, it was 76.4% this
time last year. Only the mining industry made a gain this month. It all
makes last month's gains a one off.
notable comment from Yellen in the press conference yesterday was that
she expected core inflation to rise to 2% in 2-3 years. That's measuring
with the PCE index, which has diverged from CPI. Either way, that's a
long timeline for hitting the Fed target.
don't drop as much as expected and permits miss but gain from last
month. Single family homes form the biggest part of housing and that
In the real world this report isn't
anything bad but in this world of Fed data watching they'd want to see
it keep gaining. They don't have the luxury to see falling numbers in
horror, another durable goods report all over the place. A lot of
the time this report is one step forward, two steps back.
Economic data are likely to be relegated to a supporting role as
policymakers and investors continue to discuss the implications Brexit,
at least for a while.
As a result, markets are likely to focus on central
bankers and their responses to UK voters' decision to leave the
On Wednesday, the Forum on Central Banking, hosted
by the European Central Bank (ECB) in Linho Sintra, Portugal will line
up all the big name bankers. Federal Reserve (Fed) Chair Janet Yellen
and Bank of England Governor Mark Carney are scheduled to make
appearances, alongside their host, ECB President Mario Draghi.
The key question there is, what can central banks
can do to contain downside risks to the global economy at a time when
much of their arsenal has already been used up?
Any potential disturbance from Brexit will take
time to show up in the economic data. Measures of sentiment are likely
to be the first to show how businesses and consumers are reacting to the
new sources of uncertainty.