JPMorgan Econ FI-United States-106950418

MichaelFeroli(1-212)834-5523MuratTasci(1-212)622-0288NorthAmericaEconomicResearchJPMORGANmichael.e.feroli@jpmorgan.commurat.tasci@jpmchase.com08March2024JPMorganChaseBankNADanielSilver(1-212)622-6039daniel.a.silver@jpmorgan.comUnitedStatestionwasnoisearoundasoftertrend.WebelievecoreCPIinflationsteppeddownbetweenJanuaryandFebruary,with•Nonfarmemploymentgrowthstayedstrong,withtheFebruaryreportexpectedtoshowa0.28%increaseinthecoreindex(downfrom0.39%inJanuary).Energyprices275,000jobsaddedinFebruaryincreasedinJanuarythough,andweexpectasolid0.4%gaintobereportedforheadlineCPIinflation.Theupcomingretail•Buthouseholdsurveyemploymentdeclinedandunem-salesreportalsowillgiveimportantinformationongrowthmomentuminthemiddleofthefirstquarter.Despiteeffortsatploymentrateroseto3.9%seasonaladjustment,wethinkthattheseasonallyadjusteddatawillbestronginFebruaryinpartbecauseoftheleapday•Powell’stestimonysuggestedratecutsarecomingthatmonth.Weestimatethattotalretailsalesincreased1.1%•WeforecastFebruarycoreCPIup0.3%(headline:inFebruary,withsalesoftheimportantcontrolgroupincreas-ing0.6%.0.4%)andsolidheadlineretailsalesgain(1.1%)Theeconomy’smomentumearlythisyearhasbeenstrongerFedchairPowell’scongressionaltestimonygavehimanthanwewereexpectingafewweeks(andmonths)ago.Whileopportunitytoupdateviewsfollowingthestrongroundofwestillexpect...