Pantheon Publications

21 July 2025 US Monitor Will the unwinding of June's jump in education jobs depress Q3 payrolls?

• The jump in June education jobs is more likely to be revised away than to unwind over coming months.
• June education jobs were revised down in 2022, 2023 and 2024; no other data corroborate the 2025 jump.
• A structural break following a mid-2024 methodology change makes the Michigan survey hard to believe.

Samuel TombsUS

18 July 2025 US Monitor Clearer signs of tariff-induced weakness in June retail sales volumes

• The modest gains in nominal retail sales in June were boosted by price rises; sales volumes were stagnant.
• Real consumption likely rose by just 1½% in Q2 and is on track for even slower growth in Q3.   
• The cost of new tariffs has so far been borne entirely by US importers, rather than foreign exporters. 

Samuel TombsUS

PM Datanote: US PPI, June

Services disinflation is partly countering the tariff uplift to goods prices.

Samuel TombsUS

17 July 2025 US Monitor PPI data show tariffs are inflationary, but only for goods

• PPI and CPI data collectively point to a 0.28% increase in the June core PCE deflator; tariffs mostly to blame.
• The core PPI was unchanged partly due to a plunge in prices charged for accommodation, which are volatile.
• Announcing a shadow fed Chair is a bigger risk than removing Mr. Powell immediately from his post.

Samuel TombsUS

16 July 2025 US Monitor Tariff-related price hikes hit in June, with worse to come in July

The June rise in core goods prices, ex-autos, was the biggest in three years; import-sensitive prices leapt...

...But only a quarter of the tariff costs has come through so far; expect even bigger price rises in July.

CPI services inflation will continue to cool, but it will offset only about half the pick-up in goods inflation.  

Samuel TombsUS

PM Datanote: US CPI, June

A knock-out punch to the tariff inflation deniers.

Samuel TombsUS

15 July 2025 US Monitor Retail slowdown likely continued in June, as headline sales flat-lined

• We think headline retail sales were little changed in June, after falling in April and May.
• A small price-driven increase in control sales was likely mostly offset by another fall in auto sales.
• Homebase are roughly consistent with 150K for July private payrolls, but we prefer to trust other indicators.

Samuel TombsUS

14 July 2025 US Monitor Income tax clarity won't reinvigorate households' spending in Q3

• The slowdown in consumption this year has been sharpest in areas dominated by higher earners...
• ...Slower asset price gains and expected real wage declines have weighed more than tax hike risk.
• Mortgage applications have risen sharply; people are fed up waiting for mortgage rates to fall.

Samuel TombsUS

10 July 2025 US Monitor The tariff boost to consumer prices will be undeniable in June's data

• Adobe's Digital Price Index suggests some goods prices rose in June at the fastest pace since 2023.
• Primary rent probably rose at an above-trend pace in June, while airline fares likely stopped falling.
• Residual seasonality continues to blight the services price data; expect a bigger rise in June than in May. 

Samuel TombsUS

9 July 2025 US Monitor Only higher reciprocal tariffs on the EU would tangibly lift US inflation

• Exemptions and sector-specific tariffs cover most imports from Japan, leaving the “reciprocal” rate irrelevant.
• Raising the reciprocal rate of EU imports to 50% would boost the US CPI by nearly 1/2%, but a deal is likely.
• The NY Fed survey continues to paint a far more upbeat picture than the other major consumer surveys.

Samuel TombsUS

8 July 2025 US Monitor Will the OBBBA unlock a fresh wave of business investment?

• Capex rose in 2017-to-18 after the introduction of 100% bonus depreciation, but it was not the key driver.
• Tapering bonus depreciation in 2023 and 2024 left capex unscathed; firms are now worried about tariffs.
• Average hourly earnings growth is often volatile, but the recent slowdown has been flagged by surveys too. 

Samuel TombsUS

7 July 2025 US Monitor Markets drew the wrong conclusions from June's labor market data

• June private payrolls ex-education and healthcare rose just 23K; revisions will reveal an even weaker picture.
• Hiring intentions remain depressed; new tax breaks are unlikely to offset tariff costs and uncertainty soon.
• The drop in unemployment looks like noise; payroll growth will undershoot the break-even rate in H2.

Samuel TombsUS

3 July 2025 US Monitor Will Mr. Trump blink again during the upcoming tariff spats?

• The average effective tariff rate will rise by a further 6pp next week, if no new trade deals are signed.
• But we doubt these additional tariffs will last; retaliation by trade partners will spur another climbdown. 
• The construction slump signals weaker growth in activity and employment, but likely not a recession

Samuel TombsUS

2 July 2025 US Monitor Labor demand is still weak, despite higher JOLTS openings

• Rising JOLTS job openings are driven by hospitality firms rehiring to comply with employment laws...
• ...Measurement problems also boosting the numbers; large downward revisions are now common.
• Tariff revenues currently equal 10% of the value of imports, but the effective tariff rate likely is higher.

Samuel TombsUS

1 July 2025 US Monitor Expect soft June payrolls, and yet another set of downward revisions

• The abundance of weak surveys points to a 100K first estimate for June payrolls.
• Downward revisions to estimated payrolls in April and May also are likely.
• Scraps of evidence suggest late responses from struggling small businesses explains the pattern.

Samuel TombsUS

30 June 2025 US Monitor Consumers' spending is rapidly losing momentum

• Spending fell by 0.3% in May, with little chance of a June rebound, and further weakness likely in Q3.
• The 0.4% fall in May incomes was due to one-time factors, but real income growth is set to stagnate.
• The core PCE deflator surprised to the upside in May, but the 0.18% rise will pale in comparison to June.

Samuel TombsUS

27 June 2025 US Monitor Today's May incomes and spending data will ring alarm bells

• We look for a below-consensus 0.2% decline in real expenditure in May...
• ...One-time factors likely drove the drop, but the Q3 outlook for real after-tax income growth is bleak.
• 3% GDP growth looks likely in Q2, as the unwinding of tariff distortions obscures underlying weakness.

Samuel TombsUS

26 June 2025 US Monitor How quickly will the FOMC react to higher-than-expected unemployment?

• Mr. Powell refrained from providing lawmakers with triggers and timings for the intended policy easing in H2...
• ...But 2024’s small upside unemployment surprise drove a rapid pivot; expect a repeat, despite the tariffs. 
• GDPNow’s 3.4% projection for Q2 growth looks about right; underlying momentum is about half that figure.

Samuel TombsUS

25 June 2025 US Monitor Sluggish payroll growth signalled by Homebase and the Conference Board

• Homebase data point to a mere 100K rise in June payrolls; Conference Board data point to even worse.
• No other reliable indicators of payroll growth are due to be released, so we likely will maintain our 100K forecast.
• The April surge in new home sales looks very fishy: we expect a slump in May.

Samuel TombsUS

24 June 2025 US Monitor The scope for Fed easing is much bigger than S&P PMI data suggests

• S&P reports brisk employment growth in June, but itsindex has been a very poor guide to payrolls since 2023.
• The output price index signals an implausibly large pick- up in core goods CPI inflation ahead.
• The unwinding of a one-time uplift to Social Security payments probably dragged on income growth in May.

Samuel TombsUS