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

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

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

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

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

20 June 2025 US Monitor The FOMC's forecast of continued low unemployment is wishful thinking

• Many FOMC participants raised their rate forecasts, but Mr. Powell says “no one... has a lot of conviction”.
• The Committee is overlooking several indicators that point to a material rise in unemployment ahead.
• The slump in single family construction is deepening, another headwind to activity and employment.

Samuel TombsUS

PM Datanote: US NAHB Housing Market Index, June

Demand still falling amid high mortgage rates and elevated uncertainty.

Samuel TombsUS

PM Datanote: US Industrial Production, May

Holding on to Q1's gains, for now.

Samuel TombsUS

18 June 2025 US Monitor May retail sales highlight the deteriorating outlook for spending

• The biggest fall in headline retail sales in two years suggests consumers are starting to tire…
• …More weakness is likely in the coming months, as tariff-induced price rises hit in earnest.
• The further rise in import prices ex-tariffs in May indicates tariff costs are being borne entirely in the US.

Samuel TombsUS

PM Datanote: US Michigan Sentiment Survey, June

 A broken compass.

Samuel TombsUS

PM Datanote: US CPI, May

Still waiting for the tariffs to hit.

Samuel TombsUS

PM Datanote: US PPI, May

Tariff pressures remain muted, for now.

Samuel TombsUS

13 June 2025 US Monitor May's core PCE print will be the last mild one this year

• CPI and PPI data imply a 0.12% rise in the May core PCE deflator, but 0.3-to-0.4% prints lie straight ahead.
• Momentum in services prices will rebuild in June and July, while retailers will start to pass on tariff costs.
• Jobless claims provide further evidence that the labor market is gradually softening.

Samuel TombsUS