As U.S. manufacturing fell into the dumps – along with manufacturing elsewhere around the globe – we’ve been repeatedly told by economists not to be distracted by what likely is a passing phase.
By Lindsay Dunsmuir
The Fed’s Beige Book, a compendium of anecdotes from business contacts across the U.S. central bank’s 12 regional districts, is not known for tickling detail. But it seems one regional Fed district – Boston to be precise – is paving the way in bringing a bit of relatable life to the usually dour document. In January’s report it pointed out that a toy company in its district reported strong sales “largely driven by the new Star Wars movie.” This time, it seems that all that movie-related spending has left locals with little money to spend on love. “Sales of Valentine’s Day items usually spike a few days before the holiday, but this year sales were lackluster,” the Boston Fed reported. Next time around, will we find out that children were deprived of their chocolate Easter bunnies? It’s anyone’s guess, but it seems like the researchers in Boston are minded to let us know.
A slight tremor rumbled through a key pillar of British economic growth – household spending – as consumer confidence slipped this month to its lowest level since December 2014.
Central bankers in Latin America took their fight against high currency volatility to a new level last week, with interest rate hikes in Mexico and Colombia and a ramp up in interventions in foreign exchange markets.
San Francisco Fed President John Williams on Thursday said he still thinks gradual interest-rate hikes are the “best course” (http://reut.rs/1RaUTa9), a view that fails to harmonize with that of fellow Fed policymaker James Bullard, president of the St. Louis Fed who said late Wednesday further rate hikes would be “unwise” (http://reut.rs/1XAnEjh)
Wednesday’s British pay data showing wages rose only 1.9 percent in the fourth quarter could well be the straw that broke the camel’s back for anyone still expecting the Bank of England to raise interest rates anytime soon.
Financial markets and borrowers rooting for the Reserve Bank of India to ease policy this year could be in for a disappointment – in stark contrast to 2015 when it lopped 125 basis points off the repo rate.