8 September 2025 US Monitor Payrolls warrant much looser policy, but 50bp next week is unlikely

• Payrolls lack momentum, but the first estimate for August jobs typically is revised upwards.
• Labor market slack is building, but less quickly than a year ago, when the FOMC eased by 50bp.
• The upcoming easing cycle, however, will be prolonged; we still look for 150bp cut by mid-2026.

2 September 2025 US Monitor Real consumption growth will remain listless through H2

• Near-real time data imply July’s 0.3% increase in real spending was followed by another solid rise in August...
• ...But spending has been stimulated by further tariff fears; real after-tax income growth is slowing.
• Households have exhausted their excess savings and a strong positive wealth effect is no longer in play.

24 August 2025 US Monitor We think a September easing will be the first of many

• Chair Powell’s Jackson Hole speech flags a September easing, with more cuts likely to follow.
• High long-term Treasury yields reflect policy risks rather than the Fed losing its inflation credibility…
• …We think the Trump administration should step back and let the FOMC do its job.

August 2025 - US Economic Chartbook

THE ECONOMY WILL REMAIN STUCK IN A LOW GEAR IN H2

• UNEMPLOYMENT WILL WORRY THE FED MORE THAN INFLATION

18 August 2025 US Monitor Consumption growth is stabilizing, at a sluggish pace

• Growth in consumers’ real spending has stabilized following in sharp slowdown in H1 2025...
• ...But the labor market is set to remain weak, and most of the uplift to prices from tariffs lies ahead.
• We think spending will grow only at a meager 1-to-1½% pace in second half of this year.

11 August 2025 US Monitor July core CPI likely rose by 0.3%, as the tariffs continued to bleed through

• Adobe and PriceStats data point to a slowing passthrough from the tariffs to consumer prices...
• ...But the ISM services survey sends the opposite signal; we are taking the middle position.
• Demand for air travel seems to be recovering, but hotel room rates likely are sustainably lower.

4 August 2025 US Monitor Dire July employment report makes a September easing far more likely

• Meager job gains in July and huge downward revisions leave payrolls looking far weaker than before.
• Private payrolls ex-healthcare fell by 16K per month on average in the three months to July.
• The stable unemployment rate reflects young people deferring active job search; hidden slack is mounting.