Don’t panic, it's noise not signal; the core PCE probably rose by about 0.22%.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The trend in private payrolls has halved to just 100K in six months; NFIB data signal further slowing.
- The August dip in unemployment was due to a jump in temporary layoffs unwinding; the trend is rising.
- FOMC members Waller and Williams don’t sense the urgency; expect only a 25bp easing this month.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Undershooting the Fed’s June core PCE forecast for the third straight month.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
The rising trend has flattened off; expect a run of lower numbers this fall.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Chair Powell’s Jackson Hole speech foreshadows a rapid easing of policy in the coming months.
- Headline durable goods orders likely jumped in July, but the details will be far less impressive.
- New home sales reportedly surged last month, but are unlikely to keep on climbing.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Expect a small rise in H2 sales, but the weakening labor market will constrain activity.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Weekly data are noisy; the underlying trend is still deteriorating.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
The underlying trend still looks flat; expect continued stagnation ahead.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Another month of “good data”, implying a 0.13% core PCE print.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- We look for a 0.2% increase in the July core CPI, with the risks tilted towards a lower print.
- Prices for hotels and air travel likely continued to fall; June’s small rise in rents probably was repeated.
- Core goods prices likely edged down again, driven by further falls in both new and used vehicle prices.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Underlying claims rising only slowly for now, but expect a faster deterioration ahead.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
This week’s Fed inaction was a mistake; the case for 50bp in September is strong.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The deep-rooted weakness in July’s labor market data signals that the Fed has waited too long to ease.
- Increases in the unemployment rate usually gather self-reinforcing momentum once they exceed 0.5pp.
- We maintain our long-held call for 125bp of Fed easing this year; it’s 50/50 whether they begin with 50bp.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- June's muted core PCE deflator likely will be followed by sustained benign readings.
- Consumption will slow further, as the labor market weakens and the savings rate creeps up.
- July's regional Fed services surveys also support the case for a rapid easing of monetary policy.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Interest rate rules monitored by the FOMC suggest rates should already have been reduced to 4%.
- Policy rules are sensitive to the assumed neutral rate, but also to unemployment, which will rise further.
- The latest readings for a raft of leading indicators suggest that lower housing inflation is here to stay.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
