Daily macro update

US: Housing starts (Jan.): 1366k vs 1390k expected (prior: 1515k revised from 1493k)

• Building permits were quite stable at 1483 k after 1482 k prior month.
• Housing starts have weakened for both single-family houses and multi-family houses; multi-family houses have decreased the most over the month (-13.5% m/m).
• Bad weather conditions have probably weighed down on monthly activity. Still firm permits could argue of a rebound in housing starts in Feb.

UK: CPI (Jan.): -0.1% m/m vs -0.3% expected (prior: 0.3%)

• Picture was mixed at the sector level.
• Prices were down over the month for clothes, household goods, transport-holidays, and hotels-restaurants.
• On the opposite, strong rise was seen in food, energy, housing, health, and education (rising VAT for private schools).
• The yearly trend has re-accelerated from 2.5% y/y prior month to 3% y/y, and from 3.2% to 3.7% y/y for core inflation. Services were up by 5%y/y after 4.4% y/y the prior month but slightly below BoE's expectations of 5.2%.
• UK economy is again flirting with stagflation; next BoE's meeting will see another split in voting members and recent wage-inflation data argue in favour of another pause.

UK: PPI Input prices (Jan.): 0.8% m/m vs 0.7% expected (prior: 0.2% revised from 0.1%)

• Prices of materials have surged over the month.
• Yearly trend has regained from -1.3% y/y prior month to -0.1% y/y.

UK: PPI Output prices (Jan.): 0.5% m/m vs 0.2% expected (prior: -0.2% revised from 0.1%)

• Oil and food prices have accelerated over the month.
• Yearly trend has accelerated from -0.1% y/y prior month to 0.3% y/y.

US: NY Empire manufacturing (Feb.): 5.7 vs 0 expected (prior: -12.6)

• Business sentiment has improved on current situation, driven by more positive views on new orders, shipment, inventories, but also higher prices paid and received.
• The 6-M index has eased back from the prior month, due to lower opinions on main components (new orders, employment, and capex); sentiment on 6-M prices paid has increased further while opinions on prices received have eased.

US: NAHB housing market index (Feb.): 42 vs 46 expected (prior: 47)

• Sentiment of professionals in housing has decreased over the month.
• Opinions have decreased on sales and future demand.
• Lack of reforms on rules and rising uncertainties related to trade and implied costs (appliances, lumber) have participated to the decrease in the balance of opinions.

France: CPI (Jan.): -0.2% m/m as expected (prior: 0.2%)

• Final data confirmed the monthly decline in prices.
• Prices have decreased over the month for clothes, health, and transport sectors; on the opposite, prices were stronger for fresh food, energy, and health services.
• Yearly trend was stable at 1.8% y/y and has increased from 1.4% y/y prior month to 1.7% y/y for core inflation.

Germany: Zew (Feb.): 26 vs 20 expected (prior: 10.3)

• Expectations have regained in Germany, and the index on current situation was less negative than prior month.
• The improvement in sentiment was driven by rising opinions in services, telcos, and IT sectors and less negative views on autos and engineering (but these two sectors remained depressed).
• Sentiment has sharply decreased from prior month in steel and moderately in banks.

UK: Unemployment rate (ILO) (Dec.): 4.4% vs 4.5% expected (prior: 4.4%)

• Claimant count remained stable at 4.6%.
• Jobless claims have increased from -15.1 k prior month to 22 k.; 3M employment remained positive up by 107 k after 36 k the prior period.
• Employment stayed globally positive, despite volatility seen on a monthly basis on employment and jobless claims.

UK: Average earnings incl. Bonus (Dec.): 6% y/y vs 5.9% expected (prior: 5.5% revised from 5.6%)

• Wages in services remained sustained, up by 6.1% y/y after 5.4% y/y the prior month. Momentum remained positive and sustained also in construction.

Sweden: CPI (Jan.): 0.4% m/m as expected (prior: 0.3%)

• Prices (CPIF index) have declined for transport, culture, and clothes, but were on the rise over the month for food, housing, and health sectors.
• Yearly trend has increased from 1.5% y/y prior month to 2.2% y/y; core inflation was up by 0.2% m/m after 0.3% m/m prior month and the yearly trend has increased from 2.0% y/y to 2.7% y/y.

Sweden: Unemployment rate (Jan.): 9.7% vs 8.5% expected (prior: 8.6% revised from 8.5%)

• Unemployment has surged over the month and employment has also decreased; some volatility is seen on monthly data, but trend seemed to have deteriorated for prime-age workers.

US: Retail sales (Jan): -0.9% m/m vs -0.2% expected (prior: 0.7% revised from 0.4%)

• Retail sales plummeted in January, signaling a consumer pullback after a spending surge at the end of 2024. This period was marked by devastating wildfires in Los Angeles and severe winter weather across the country.
• However, declines in nine out of 13 categories, including motor vehicles, sporting goods, and furniture, suggest factors beyond weather, such as high borrowing costs, might impacting consumers.
• Excluding autos and gas, sales fell more than anticipated (-0.5% vs. -0.3%), and the control group, crucial for GDP goods spending calculations, also underperformed (-0.8% vs. -0.3%).

US: Import price index (Jan): 0.3% m/m vs 0.4% expected (prior: 0.2% revised from 0.1%)

• Import prices rose less than anticipated, ahead of new US tariffs on China, which could influence prices throughout the year. Fuel imports surged by 3.2%, up from 1.7% in December, while nonfuel imports increased by 0.1%, maintaining the same pace as the previous month.

US: Industrial production (Jan): 0.5% m/m vs 0.3% expected (prior: 1.0% revised from 0.9%)

• A significant factor in the growth was a 0.2 percentage point boost from aircraft and parts production, following the resolution of a work stoppage at a major manufacturer.
• Utility output surged by 7.2%, with electric utilities up 6.1% and natural gas utilities soaring 15.4%. However, manufacturing output, which makes up 78% of total industrial production, fell by 0.1%, dragged down by a 5.2% drop in motor vehicles and parts.

US: Business inventories (Dec): -0.2% m/m vs -0.1% expected (prior: 0.1%)

• Inventories from manufacturers, retailers, and wholesalers fell more than anticipated in December, with the inventory-to-sales ratio dropping from 1.37 to 1.35.

Eurozone: GDP (4Q): 0.1% q/q vs 0.0% expected (prior: 0.0%)

• At the end of last year, the eurozone unexpectedly achieved a slight growth of 0.1%, surpassing the zero growth anticipated by EU statistics as of January 30th.
• This modest expansion was driven by updated data from individual member countries, notably the Netherlands, the bloc's fifth-largest economy, which saw a 0.4% increase in output.
• Among the other major economies, Spain experienced a 0.8% growth, while Italy remained stagnant, and both Germany (-0.2%) and France (-0.1%) contracted.
• Considering full year, the economy expanded 0.7%, above 0.4% in 2023, but the prospect of US tariffs could weigh on eurozone growth in 2025.