Weekly Economic & Financial Commentary

Summary

United States: The Calm Before the Storm

• This week brought glimpses of market stabilization after weeks of turmoil. Although consumers seem unfazed by the uproar, tighter credit conditions coming down the pipeline will likely weigh on growth. Meanwhile, inflation continues to advance at a stubbornly high pace, adding to the case for a 25 bps hike in May.

• Next week: ISM PMIs (Mon & Wed), Trade Balance (Wed), Nonfarm Payrolls (Fri)

International: Sticky Eurozone Core Inflation

• The Eurozone is a perfect example of how inflation can be "sticky" coming down. While headline CPI inflation has receded from its peak, core inflation, which strips out volatile components like food and energy, has continued to push higher and remains stubbornly elevated.

• Next week: Japan Tankan Survey (Mon), RBA Rate Decision (Tue), RBNZ Rate Decision (Wed)

Credit Market Insights: Survey Says... Declining Demand for Consumer Credit

• Recently released data from the New York Fed's credit access survey support the premise that consumers are finding it increasingly difficult to draw on credit. Consumer demand for credit declined 4.8% between October 2022 and February 2023, the third-largest decline reported in the tri-annual survey data going back to 2013.

Topic of the Week: Pandemic Population Shifts Slowed Down in 2022

• One significant change brought on by the pandemic was a rapid decline in net domestic migration for many large counties in the United States. According to new data published this week by the Census Bureau, outmigration from those counties slowed down in 2022. A sharp rebound in international migration was another noteworthy change.

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