- Our Homebase model points to a 250K jump in August private payrolls, which looks implausible.
- Other labor market indicators are far less upbeat; we have pencilled in an increase of 125K.
- We expect a meagre rise in government payrolls this month, and see a sharp slowdown ahead.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
A weather-related plunge in July, but residential construction set for a weak Q3.
Oliver Allen (Senior US Economist)US
- July’s drop in single-family starts was concentrated in the South, probably a hit from Hurricane Beryl...
- ..Still, the overhang of new home inventory points to a downturn in residential construction.
- Consumers’ confidence has picked up despite the stock market dip, pointing to solid spending growth.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Lower mortgage rates came too late for this month's survey.
Oliver Allen (Senior US Economist)US
Consumers keep spending, despite deteriorating fundamentals.
Oliver Allen (Senior US Economist)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
- Retail sales were strong in July, but weak consumer fundamentals still point to a slowdown ahead.
- The fall in initial claims distracts from the slowly rising trend; expect higher prints ahead.
- We think housing starts dipped in July, as rising inventory drove a drop in single-family construction.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- The July CPI and PPI data collectively point to a mere 0.13% increase in the core PCE deflator...
- ...But seasonal adjustment now might be flattering the data; the dip in CPI hospital prices will unwind.
- We look today for a fall in July manufacturing output and a slight increase in initial jobless claims.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
Headline index surges, but the details still point to weakness.
Oliver Allen (Senior US Economist)US
- PCE-relevant components of the PPI collectively rose in July at the slowest rate for 11 months.
- Hospital services prices will rebound soon, but core goods prices will drop as retailers’ margins contract.
- We look for a weak July retail sales report Thursday, with the control measure falling by 0.3%.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- July PPI data likely to reverse to June’s jump in retailers’ gross margins; a profit squeeze lies ahead.
- The NFIB survey likely will show small firms remain under intense pressure from high interest rates.
- Inflation expectations are trending down, but the plunge in the NY Fed’s three-year measure is noise.
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
- The first estimate of GDP growth was positive at the start of the last three normal recessions...
- ...Payrolls provided a much better near-real time guide; they are not flashing bright red, for now.
- Initial claims still point to a resilient economy, but a run of higher prints this autumn remains likely.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- We look for a decline in initial claims to 235K, from 249K, as the boost from Hurricane Beryl wears off...
- ...The trend in initial claims is rising, but daily Homebase employment data present no cause for panic.
- The latest plunge in Treasury yields likely will support housing market activity only marginally.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- A 5% stock price fall usually knocks confidence enough to lower real consumer spending growth by about 0.5pp.
- Associated falls in interest rates will do less than usual to bolster confidence, as households are less indebted.
- Bank lending standards are now tightening at a slower pace, but they remain very restrictive.
Ian Shepherdson (Chief Economist, Chairman and Founder)US
- Economic and market conditions usually have been worse than now to trigger an emergency Fed meeting...
- ...But rates are far above neutral and the next meeting is six weeks out; Mr. Powell will act if markets deteriorate.
- July’s ISM services survey kept recession fears at bay, but it still strongly supports the case for Fed easing.
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