US Pulse: Emerging Signs of Slowdown in Private Demand

Signs of a US private demand slowdown are emerging, characterized by softening retail sales and multi-decade lows in small business investment plans. High energy prices are masking modest underlying inflation, keeping the FOMC cautious ahead of a leadership change.

Key Takeaways

• 1.US private demand is slowing, with April retail sales ex-gasoline rising only 0.3% m/m, down from 0.7% in March.
• 2.Energy price shocks are driving high headline inflation (CPI 3.8% y/y), creating uncertainty despite modest underlying inflation momentum.
• 3.Small business confidence and investment plans are weak, with NFIB capex plans falling to their lowest level since 2009.

Table of Contents

• What we're watching
• Real activity may be slowing in response to energy price surge
• Demand-pull inflation is weak
• Data pulse: the week ahead
• Data pulse: the week that was

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