US: Strong economic releases across the board - Nomura

Analysts at Nomura note that the US posted strong economic data sets across the board in the previous session.

Key Quotes

“NFIB Small Business Survey: The small business optimism index was up 7.4pp at 105.8 in December, marking the highest reading since the end of 2004. This reading appears consistent with other business surveys that implied improved optimism after the election, although real data appear slow to trail the suggested optimism. Details suggest this optimism may sustain in the near term. 50% of respondents, a strong jump from 12% in the prior month, stated that they expected a better economy in the next six months. Moreover, respondents expecting real sales gains increased strongly by 20pp to 31%. As for labor market conditions, 29% of respondents reported job openings they could not fill, down only 2pp from the prior month, suggesting that the labor markets remain tight.”

“JOLTS: Job openings increased slightly to 5522k in November from downwardly revised 5451k in October (previously reported as 5534k). Hires and separations inched up slightly to 5219k and 5028k, respectively. The elevated level of job openings suggests that the labor market conditions remain firm.”

“Wholesale inventories: In the final estimate, wholesale inventories were revised upwards to an increase of 1.0% m-o-m in November (previously reported as a 0.9% increase in the advance estimate). Inventories of durable and nondurable goods both increased modestly by 1.0% after weak readings in the prior month. Looking ahead, the strong gain in wholesale inventories is positive for total business inventories in the fourth quarter of last year. The final estimate of business inventories is scheduled to be released on Friday, 13 January.”

“Q4 GDP tracking update: November wholesale inventories were raised by 0.1pp to a 1.0% m-o-m increase according to the latest Department of Commerce report. The upward revision suggests that private inventory investment was stronger than previously reported. As such, we revise upwards our Q4 GDP tracking estimate by 0.1pp to 1.5% from 1.4%, previously.”