Home Business The latest in key economic data ahead of Fed’s Sept. 20-21 meeting

The latest in key economic data ahead of Fed’s Sept. 20-21 meeting

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The U.S. central bank has lifted interest rates by three-quarters of a

percentage point at each of its last two policy meetings, and Federal Reserve Chair Jerome

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Powell said another “unusually large” increase could be appropriate at the Fed’s Sept. 20-21

meeting, depending on whether economic data points to progress in reducing the highest inflation

in four decades.

Data Friday showed the U.S. labor market is going in the right direction for the Fed, as

demand for labor appears to be easing, labor supply is on the rise, and wage growth is

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moderating. Fed funds futures traders still see a 75 basis point rate hike in September as more

likely than a 50 basis point increase, according to the CME Fedwatch tool, but the odds are

evening. Data on inflation and inflation expectations that will be particularly decisive for the

Fed’s rate-setting decision are still ahead.

Below is a dashboard of some of the key indicators that have been or will be released during

the lengthy eight-week gap between the Fed’s July and September meetings, and an assessment of

their impact on the Fed’s calculus.

Date Report Data type Result Builds case for Story

or against

“unusually large”

Sept hike?

Sept 2 Nonfarm Labor market Employers hired Against: The Fed

payrolls (net 315,000 workers in may take comfort

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jobs & UE August, down from on signs that

rate) July; the demand for labor

unemployment rate is easing even as

rose to 3.7% from supply rises

3.5% as more

workers rejoined

the labor force

Sept 2 Nonfarm Inflation Average hourly Against:

payrolls (avg. earnings rose 0.3% Moderating wage

hourly in August from growth suggests

earnings) July, down from easing upward

the previous pressure on

month’s 0.5% gain. inflation.

Sept 1 ISM Industrial Manufacturing For: Activity has

manufacturing production activity did not slowed since the

(activity slow in August; Fed began raising

index) makers of computer rates, but the

and electronics lack of progress

reported strong last month may

demand suggest more

pressure is

needed.

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Sept 1 ISM Inflation Prices rose at the Against: Suggests

manufacturing slowest since June demand and supply

(prices paid 2020 are coming into

index) better balance, a

key Fed aim.

Sept 1 Jobless claims Labor market New unemployment For: The labor

benefit claims market remains

fell to a tight

two-month low

Aug 30 JOLTS Labor market Job openings rose For: Demand for

unexpectedly in labor remains

July, to 11.24 high, despite the

million, meaning Fed’s aggressive

there were nearly rate hikes aimed

two open jobs for at slowing growth

every job seeker.

Data for June job

openings was

revised higher.

Aug 26 UMich consumer Inflation One-year inflation Against: But only

inflation expectations expectations fell barely, as

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outlook (F) to an eight-month longer-term

low of 4.8% from inflation

5.2% in July as expectations did

gas prices eased; not deteriorate

the five-year but neither did

inflation outlook they improve.

was unchanged at

2.9%.

Aug 26 Personal Consumption Spending rose 0.1% Against: Adds to

spending & in July, less than evidence of the

income expected, after economy softening

advancing 1.0% in

June

Aug 26 PCE price Inflation The Fed’s Against: Cooling

index preferred inflation

inflation measure pressures are a

slipped 0.1% last welcome sign,

month compared though

with June, the policymakers want

first drop since to see more

April 2020; from a evidence before

year earlier it they will feel

rose 6.3%, down confident about

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from 6.8% in June. the direction of

price pressures.

Aug 25 GDP (2nd read) Economic Q2 contraction was For: While 2

growth more moderate than months in the

indicated in the rearview mirror,

advance reading it showed

from a month consumption had

earlier; consumer rebuilt momentum

spending revised coming into the

up; GDP deflator current quarter

revised higher and inflation as

measured by the

GDP deflator was

still far too

high

Aug 25 Jobless claims Labor market New claims edged For: The

lower for a second continuing claims

week and both that portion – a proxy

and continued for hiring –

claims dropped to covered the

the lowest in a survey week for

month next week’s

August nonfarm

payrolls report,

suggesting tight

labor market

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conditions

persist

Aug 18 Jobless claims Labor market New claims fell For: Still no

and the prior week sign of

was revised lower widespread job

losses

Aug 17 Retail sales Consumption Headline flat but For: The Fed

the core figure would like to see

was up more than consumer demand

expected at 0.8% weakening, not

from the prior just shifting to

month, indicating other spending

no real stalling categories as

yet in consumer gasoline prices

spending drop

Aug 12 UMich consumer Inflation The 1-year outlook A wash: On the

inflation expectations dropped to 5.0% upside, the

outlook (P) from 5.2% but the impetus for

five-year long-term

expectation ticked expectations to

back up to 3.0% rise further

from 2.9% appears to have

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faded but they

are not yet

moving toward the

prevailing

pre-COVID trend

Aug 11 PPI Inflation Producer prices Against: Like

unexpectedly fell, CPI, this

and rose less than downside surprise

expected even when on inflation has

excluding energy markets expecting

and food a hike of 50 bps

Aug 10 CPI Inflation Headline came in Against: Arguably

well below the first

expectations and pleasant surprise

even the for the Fed on

ex-food/energy the inflation

component was front in a long

softer than most time. BUT …

forecasts officials have

been repeatedly

burned in prior

attempts to call

a top, and a lot

of the relief

came from the

drop in gas

prices alone

Aug 5 Nonfarm Inflation Wage gains were For: no sign yet

payrolls (avg. much stronger than that 225 basis

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hourly expected and the points of

earnings) prior month’s tightening is

increase was putting a dent in

revised up the pace of wage

gains

Aug 5 Nonfarm Labor market Headline jobs For: no sign yet

payrolls (net creation of 528k that 225 basis

jobs & UE was much stronger points of

rate) than expected and tightening is

closed the putting a dent in

remaining deficit the pace of

of jobs lost hiring.

during the

pandemic

Aug 4 Jobless claims Labor market New claims in the For: headline

250-260k range for number inflated

a third straight by seasonal

week, near the factors, with the

highest since NSA new claims

November; number closer to

continued claims 200k and showing

highest since labor market

April remains tight

Aug 3 ISM services Inflation The prices paid Against: along

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(prices paid index dropped by with ISM’s

index) the most in five factory series,

years another signal of

input price

pressures easing

Aug 3 ISM services Service Services activity Against: activity

(activity sector picked up more consistent

index) activity unexpectedly, with with soft-landing

new order growth than recession

the strongest in

four months;

employment index

contracted

moderately for a

second month

Aug 2 JOLTS Labor market Job openings A wash:

declined by the openings-to-unemp

most in more than loyed ratio at

two years 1.8:1 is down

from March’s 2:1

high but has

further to go

Aug 1 ISM Inflation July’s index for Against: shows

Manufacturing input prices input price

(prices paid plunged to lowest pressures easing

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index) in nearly two notably

years

Aug 1 ISM Industrial July’s factory Against:

Manufacturing production activity slowed, indicates further

(activity though a bit less ebbing of goods

index) than expected demand

July 29 UMich consumer Inflation July’s final Against: moderate

inflation expectations 5-year expectation positive for Fed

outlook (F) fell to lowest effort to keep

since December inflation

expectations

anchored

July 29 Employment Wage Q2’s employment For: indicates

Cost Index inflation costs moderated wage pressures

less than expected remain sticky

Upcoming data:

Sept 6 ISM services Service

(activity sector

index) activity

Sept 6 ISM services Inflation

(prices paid

index)

Sept 8 Jobless claims Labor market

Sept 13 CPI Inflation

Sept 14 PPI Inflation

Sept 15 Retail sales Consumption

Sept 15 Jobless claims Labor market

Sept 16 UMich consumer Inflation

inflation expectations

outlook (P)

(Compiled by Federal Reserve reporting team; Editing by Dan Burns, David Holmes, Paul Simao,

Elaine Hardcastle, Susan Fenton and Jonathan Oatis)

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