US macro scorecard - March

Daniel Richards - MENA Economist
Published Date: 27 April 2021


A round-up of the most widely followed monthly macro data points from the US, compared to expectations and the previous month's results.

US macro scorecard

Source: Bloomberg, Emirates NBD Research

  • As anticipated, March data in the US displayed a resounding improvement on February’s, which had been an awkward month squeezed between two stimulus cheques and beset by poor weather conditions (see US macro scorecard - February). Not only did all of the most-followed macroeconomic indicators improve on the previous month in March, they almost all exceeded Bloomberg consensus projections also, resulting in a largely green scorecard for the month (only durable goods orders and industrial production fell short of expectations). On the back of this strong March data and some positive early April releases, all eyes will be on the FOMC meeting this week, with the statement and press conference set to be parsed for any indication that the Federal Reserve might tighten monetary policy more rapidly than it has been maintaining it will do so. Fed Chair Jerome Powell told the media this month that the US was at an ‘inflection point’, and the positive news has only continued since that point.
  • The jobs data for March was especially positive, with a net gain of 916,000 on the non-farm payrolls (and a further 900,000 projected for this month), while the more timely initial jobless claims data shows an ongoing decline in the number of new claimants each week. Nevertheless, we do not expect any significant changes to the language from the FOMC this week, and anticipate an ongoing commitment to securing full employment, even if this means allowing inflation to run hot for a period. The headline unemployment rate has fallen to 6.0% but this obscures the large number of discouraged workers, and the total number of jobs remains some 9mn off pre-pandemic levels  (see Headline employment gains obscure residual underlying challenges).
  • Aside from the jobs data, other household indicators benefitted from the direct payment cheques which landed on doorsteps in March and helped boost retail sales once again. These expanded by 9.8% m/m, outpacing projections of 5.8% and faster than the 7.6% boost provided by the January stimulus cheque. Meanwhile the University of Michigan consumer sentiment index rose to 86.5, the highest level since March last year, just as the pandemic was starting to take hold in the US. Alongside the stimulus cheques, the steadily improving situation in the US with regards the pandemic, where the vaccination programme is progressing apace, has helped improve sentiment amongst consumers.
  • One of the US data underperformers in March was durable goods orders. While they did increase by 0.5% m/m (compared to February’s contraction of -0.9%), this was far short of the 2.5% growth projected by Bloomberg consensus respondees. Growth was dragged down by orders for commercial aircraft which fell by 47% (which did not necessarily align with Boeing’s report of 196 new orders in March), while the global chip shortage also appeared to still weigh on orders more generally. These ongoing supply constraints run the risk of further boosting inflation from the 2.6% y/y it hit in March.