Sadly, as promised, the US recovery is slowing to its formerly anaemic pace. The data last night was uniformly mangy. First, the final GDP print for the first quarter was revised down to a measly 1.9% annualised:
Next, the Chicago PMI for May fell sharply from 56.8 to 52.7, to its lowest point since the GFC:
Weekly initial jobless claims missed expectations and rose to 383k. There is now a clear stall in labour market improvements:
The ADP employment report for May missed as well, printing 133k private sector jobs, well under the 150k expected and looks to be rolling over:
On a slightly better note, Bloomberg’s Consumer Comfort index retraced some its big fall from last month, but also missed:
None of this augurs well for the three big reports tonight, BIS employment, ISM manufacturing or the Personal Consumption Expenditures but we shall see.
The reason why the US economy is destined to misfire on any recovery acceleration was also clear overnight. The New York Fed released its quarterly household debt survey and deleveraging remains intact:
In short. without credit growth to accelerate demand, it is only productive investment that can drive growth and it’s waning too, as we saw yesterday and today.
Hopefully tonight’s data will buck the trend. If not, stall speed looms again for the US economy and we’ll be one bad month of housing data away from triple dip fears gripping the US market.
