This Week's State Of The Economy - What Is Ahead? - 16 September 2022

By: Taro Chellaram /Wells Fargo Economics & Financial Report/Sep 20, 2022

This Week's State Of The Economy - What Is Ahead? - 16 September 2022

Financial markets reacted in a zig-zag pattern to this week's economic data ahead of the next FOMC meeting. Price pressure is still not showing the sustained slowdown the Fed needs before it takes its foot off the throttle of tighter policy. At the same time, consumer goods spending and manufacturing activity are slowing, but not yet to a worrying degree consistent with contraction, and not enough to aid in bringing inflation lower. This week's data have thus further confirmed our view that the FOMC will press ahead with another 75 bp rate hike at its meeting next week. For more detail on our expectations for its meeting, please see our Domestic Outlook and Interest Rate Watch sections.

Wednesday's release of the August Consumer Price Index received the most market attention, in part because it came in hotter than the consensus estimate but also because the underlying details were a bit disappointing. Consumer prices rose 0.1% last month, while the consensus Bloomberg estimate had been looking for an equivalent 0.1% decline. This price gain still helped lower the year-over-year rate of price growth to 8.3%, which is a welcome but insufficient step in relieving excruciatingly high inflation for Americans.

The 0.6% gain in core inflation (excluding food and energy), which was more than double the consensus expectation, demonstrates that price pressure remains widespread across the economy. Core goods inflation specifically remained strong (+0.5%) despite indications that supply chains are functioning more smoothly, inventory stockpiles are building and goods spending is gradually slowing. Goods prices thus did not provide the needed offset to higher core services inflation, which saw a 0.6% rise due in part to stronger shelter inflation. Over the past three months, the core CPI has advanced at a 6.5% annualized pace, more than triple the Fed's 2% target (chart). A sustained return to 2% inflation remains even more distant at present, and the price data suggest more has to be done to rein in this stubbornly high level of inflation.




This Week's State Of The Economy - What Is Ahead? - 05 May 2023

In April, employers added 253K jobs and the unemployment rate fell to 3.4%. During the same month, the ISM services index edged up to 51.9, while the ISM manufacturing index improved to 47.1.

This Week's State Of The Economy - What Is Ahead? - 18 November 2022

The resiliency of the U.S. consumer was also on display, as total retail sales increased a stronger-than-expected 1.3% in October, boosted, in part, by a 1.3% jump in motor vehicles & parts and a 4.1% rise at gasoline stations.

This Week's State Of The Economy - What Is Ahead? - 09 October 2020

Weekly first time unemployment claims highlighted an extraordinarily slow week for economic news. Jobless claims fell slightly but continuing claims fell by one million.

13 January 2021 Monthly Outlook Report

The U.S. economy appears to be losing some momentum as the calendar turns to 2021 and the public health situation continues to deteriorate.

This Week's State Of The Economy - What Is Ahead? - 08 January 2021

The manufacturing sector is showing a great deal of resilience, with the ISM Manufacturing survey exceeding expectations, at 60.7, and factory orders remaining strong.

This Week's State Of The Economy - What Is Ahead? - 05 August 2022

The Bureau of Labor Statistics reported this morning that nonfarm payrolls increased 528,000 for the month of July, easily topping estimates, lowering the unemployment rate to 3.5%.

This Week's State Of The Economy - What Is Ahead? - 05 April 2024

Nonfarm payrolls expanded 303K in March, surpassing all estimates submitted to Bloomberg. The continued strength in hiring suggests less urgency for policymakers at the Federal Reserve to lower the target range of the fed funds rate.

2021 Annual Economic Outlook

The longest U.S. economic expansion since the end of the Second World War came to an abrupt end earlier this year as the COVID pandemic essentially shut down the economy.

This Week's State Of The Economy - What Is Ahead? - 4 October 2019

Survey evidence flashed signs of contraction in the manufacturing sector and indicated weakness spreading to the services side of the economy, while employers added a less-than-expected 136K jobs in September.

This Week's State Of The Economy - What Is Ahead? - 02 October 2020

In what was a jam-packed week of economic data, the jobs report, prospects of additional fiscal stimulus and the president’s positive COVID-19 test result commanded markets’ attention.


Instagram

@ tcgcrealestate

Subscribe Now! IT's Free

Stay up to date with all news coming straight in your mailbox.

Copyright © 2024 TC Global Commercial. All rights reserved.