A big week ahead: be sure not to miss these important updates

Between breaking down OER, the jobs market, and the CPI, lots of new research is headed your way, with six important updates scheduled to be released in the near future.

Over the next week, a slate of important economic data is set to be released, with potentially significant market ramifications.

Given my commitment to ensuring that you stay on top of everything that you need to know in regards to the US economy, here’s a rundown of what lies ahead, and what you can expect to receive from Economics Uncovered over the coming days and weeks.

An explanation of what’s happening with owners’ equivalent rent

Following the spike in owners’ equivalent rent (OER) and its significant divergence from rent of primary residence in January, many have been wondering whether this signals an ongoing risk for the inflation outlook, or whether this is instead a temporary blip.

In addressing this divergence, the BLS recently stated that “in January 2024, the proportion of OER weighted toward single-family-detached homes increased by approximately 5 percentage points”.

The BLS have also announced that they “will hold a webinar on Thursday, March 7, 2024, at noon ET to discuss the underlying methodology related to the January 2024 Consumer Price Index (CPI) for rent and owners’ equivalent rent (OER)”.

Given the potential for the BLS to release important additional information during this webinar, I am holding off on releasing my research update on OER, and the associated potential ramifications for the overall CPI, until after this webinar.

US jobs report — despite the mainstream news headlines, the strength of the US labour market is anything but clear

The next major US economic data release is the upcoming jobs report, which will be released Friday morning ET.

While the consensus narrative is that the US employment market remains strong, the underlying reality is anything but clear.

Yes, the unemployment rate is relatively low and nonfarm payroll growth was stronger in December and January, but the latest US labour market data also reveals a whole host of weak/downright recessionary indicators.

Such indicators include: a major weakening in household survey employment growth; a significant decline in full-time employment; plunging average weekly hours; and a significant increase in underemployment from its cycle trough.

More recently, various BLS, Fed, and private sector data on job openings, quits, hires, wage growth, and services sector employment, have also indicated a further weakening of the US jobs market.

Given the significant array of data that suggests a significant weakening of the US employment market, which is in strong contrast to the current consensus view that the US employment market remains strong, I will soon be releasing a US Jobs Report Preview.

You can expect my comprehensive US Jobs Report Review to be released prior to the US market open on Monday.

A particularly important CPI report

Given January’s hotter inflation data, another hot CPI report in February could lead to a major reevaluation of the interest rate outlook and send a material shockwave through markets.

In light of this backdrop, February’s US CPI report holds particularly significant importance.

As per usual, my upcoming US CPI Preview will include my proprietary estimates for headline and core CPI growth.

I intend to release this report well before Monday’s US market open.

You can expect my US CPI Review to follow shortly after the release of the latest US CPI data, which will break down some of the granular details within the CPI data, including a particular focus on whether any additional signs of services price disinflation are being seen.

Medium-term US CPI forecast update

After releasing my monthly US CPI Review, I intend to begin working on an update to my medium-term US CPI forecasts.

While this represents a quicker than usual update (I generally update my medium-term US CPI forecasts on a quarterly basis), in light of the higher than expected CPI reading in January, and the potential ramifications of the BLS’ reweighting of the OER sample, I have decided to release an out of cycle update to my medium-term US CPI forecasts — while this means that I’ll be working even harder, remember, I am focused on ensuring that Economics Uncovered provides you with some of the most comprehensive inflation analysis that you can find.

Within this update, I intend to include a detailed analysis on the implications for Fed policy and financial markets.

Important disclaimer—this may affect your legal rights:

This report is an economics research publication and is not investment advice. This economics research represents my own analysis, opinions and views, is general in nature, and does not constitute personal advice to any person.

While my research may make mention of potential financial market implications, this analysis is general in nature and does not constitute personal advice to any person.

While this research utilises data which is considered to be reliable, I have not independently verified the accuracy of the data utilised in this research.

While I have taken care to try and ensure that the figures, data and information presented in this research are accurate and free of errors, I am not perfect, and the report may contain errors or omissions that may become apparent after this research has been published.

Furthermore, this report may contain forward-looking statements, which are subject to inherent variability and are subject to risks and uncertainties. Forward-looking statements may be identified by the use of terminology, including, but not limited to, ‘anticipate’, ‘estimate’, ‘expect’, ‘may’, ‘forecast’, ‘trend’ or similar words. Forward-looking statements are based on current expectations and reflect judgements, assumptions and estimates and other information available as at the date made. Forward-looking statements in this presentation do not represent guarantees and are subject to significant uncertainties which may cause actual results to differ materially from the forecasts expressed in this report. As such, I caution against reliance on any forward-looking statements.

I do not represent, warrant or guarantee expressly or impliedly, that the data and information contained in this research is complete or accurate. I do not accept any responsibility to inform you of any matter that subsequently comes to my attention, which may affect any of the information contained in this research. I do not accept any obligation to correct or update the information or opinions contained in this research. I do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omissions in this document or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this document or any other person.