31 July 2025 US Monitor Markets cut September easing odds post-FOMC, but the data will decide

• Markets cut September easing odds to 50% after Mr. Powell spoke, but labor market data will force the issue.
• 3% headline GDP growth mostly reflects the distortions that depressed growth in Q1 unwinding. 
• Underlying growth has slowed sharply since late 2024, and looks set to remain relatively weak. 

Samuel TombsUS

30 July 2025 US Monitor The labor market is limping on; trade deals won't reinvigorate it

• Job openings are trending down and people say new jobs are harder to find; expect subpar July payrolls.
• The fall in demand for more labor has been led by non-retail services; tariff certainty won't help much.
• Q2 GDP likely rose at a 3% pace—cue White House bragging—but the trend is likely just half that rate.

Samuel TombsUS

29 July 2025 US Monitor The consensus for a three-digit July payroll print looks complacent 

• We look for a 75K rise in July payrolls; key surveys are weak and federal job cuts likely increased.
• A rebound in the unemployment rate looks likely, given the sustained rise in continuing claims.
• The 15% tariff on EU imports includes most previously exempt goods, so the overall AETR has risen to 17%.

Samuel TombsUS

28 July 2025 US Monitor Headline GDP likely jumped by 3% in Q2, obscuring underlying weakness

• We think headline GDP leapt by around 3% in Q2 overall, but underlying growth was much weaker…
• …Look for a tepid 1½% gain consumers’ spending and a drop of about 2½% in fixed investment…
• …But measurement issues likely meant a huge contribution from net trade was only partly offset elsewhere.

Samuel TombsUS

22 July 2025 US Monitor State-level payrolls cast further doubt on a migrant exodus

• BLS data suggesting the foreign-born workforce is already rapidly shrinking look implausible.
• Sector-level payrolls in California and Texas suggest most undocumented workers remain in their jobs.
• A bird’s eye view of employment growth in the other 48 states and DC tells a similar story.

Samuel TombsUS

July 2025 - US Economic Chartbook

CONSUMERS’ SPENDING IS SLOWING...

• ...WEAKER PAYROLLS IN Q3 WILL EXERT FURTHER PRESSURE

Samuel TombsUS

PM Datanote: US Michigan Sentiment Survey, July

Hard to trust given the rock-bottom response rate.

Samuel TombsUS

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