1Michael Feroli (1-212) 834-5523michael.e.feroli@jpmorgan.comJPMorgan Chase Bank NADaniel Silver (1-212) 622-6039daniel.a.silver@jpmorgan.comMurat Tasci (1-212) 622-0288murat.tasci@jpmchase.comNorth America Economic ResearchGlobal Data Watch09 February 2024J P M O R G A NThe data flow picks up next week, with both the January retail sales and CPI reports. We expect that seasonal adjust-ment factors—which may have flattered December retail sales—will present a headwind to January retail sales, and we look for total sales to slip 0.9% and sales in the important control category to be flat. For the CPI we expect declining energy prices will limit the headline figure to just a 0.1% increase, which would take the year-ago gain down to 2.9% from 3.4% in December. We also look for a high-side 0.2% increase in the ex-food and energy core measure, held down by an expected decline in used vehicle prices.Mixed credit newsThe Fed�s Senior Loan Officer Opinion Survey (SLOOS) showed less widespread tightening in lending standards for many of the different reported loan types in the most recent quarter (generally coinciding with 4Q). For example, a net 14.5% of banks reported tightening lending standards for C&I loans to large and medium firms in the most recent quarter, down from a net share of 33.9% in the prior quarter and a net share of 50.8% in the one before that (Figure 1). There also has been a similar large shift down in the net share of banks reporting tightening in standards for CRE loans lately along with more modest declines in the net shares of banks tighten-ing for residential real estate and consumer loans. -50-25025507510090950005101520Net %Figure 1: Domestic banks tightening C&I loan standardsSource: Federal Reserve Board, J.P. MorganTo large andmedium-size firmsTo small firmsIn spite of the turn in the series for CRE, it was hard to get warm and fuzzy feelings about that sector of the economy this week. Markets remained focused on CRE-related losses at regional lenders, presenting a new risk to credit availability. One of the hallmarks of this expansion has been pristine con-sumer balance sheets. Supported by ample fiscal support in �20 and �21, household debt loads have been modest and cred-it performance solid. Over the course of �22 and �23 those metrics have generally been normalizing back toward pre-pandemic norms. Recently, however, there have been pockets of credit that are starting to look a little worse than before the pandemic (Figure 2). •Fed rhetoric continued to signal rate cuts this year, but not in March•Jobless claims and business surveys point to ongoing expansion in 1Q24•Fiscal year �24 federal deficit looking a little less bad, but very far from good•Next week�s January retail sales expected weak, and core CPI expected benignThe news flow concerning the US economy was fairly light this week, a...
