ANZ US Pulse: Early Signs of Slower Private Demand - FJElite

The main message is that there are early signs private demand is starting to slow. Inflation remains noisy in the near term because headline CPI and PPI are still reflecting the energy shock, even though underlying inflation momentum appears more modest. Retail sales ex-gasoline rose just 0.3% in April, down from 0.7% in March, suggesting the boost from enhanced tax rebates is fading, while weak consumer confidence points in the same direction. The April NFIB survey also showed softer sales and very weak capex plans, with investment intentions falling to their lowest level since 2009.

This week’s focus is on what that means for policy and activity. The FOMC minutes will be watched closely for more detail on the dissents at the April meeting, while the resignation of Governor Miran ahead of Warsh’s arrival puts extra attention on Fed independence. Preliminary April PMIs are also important, particularly for whether firms are still holding up because of frontloading and whether higher input costs are being absorbed or passed on, which will matter for both demand and the inflation outlook.