8 August 2025 US Monitor NY Fed survey suggests consumers are downbeat but not distressed

• This year’s consumer slowdown has little to do with worries about taxes, more with trade and tariffs.
• The recent recovery in sentiment reduces recession risk, but the outlook for spending still is dim. 
• Rising continuing claims reinforce the idea that the labor market has loosened materially. 

Samuel TombsUS

7 August 2025 US Monitor Wealth effects are unlikely to give consumption much of a boost

• Swings in home prices have a far bigger dollar-for-dollar wealth effect than movements in stock prices.
• Ongoing weakness in the housing implies a trivial boost to consumption from asset prices in H2 2025.
• Labor-matching efficiency is impeded slightly by high new mortgage rates, but is comparable to the 2010s.

Samuel TombsUS

6 August 2025 US Monitor Why have tariff revenues undershot the White House's expectations?

• China’s share of US imports has collapsed to just 7%, from 13%, but looks set to rebound soon. 
• Some importers likely have gamed the de minimis exemption, but the loophole will close later this month.
• Services inflation likely will remain contained, despite the further increase in the ISM prices index.

Samuel TombsUS

5 August 2025 US Monitor The average effective tariff rate is now near 20%; upside risks ahead

• The average effective tariff rate has risen to 19%, from 16% a month ago; risks tilt towards a further rise.
• Shifting trade flows, margin compression and price rises abroad will temper the boost to consumer prices.
• The DOGE cuts were a small but significant drag on GDP in Q2, and probably will be again in Q3.

Samuel TombsUS

PM Datanote: US Employment, July 2025

Revisions reveal a sharp slowdown; September easing incoming.

Samuel TombsUS

4 August 2025 US Monitor Dire July employment report makes a September easing far more likely

• Meager job gains in July and huge downward revisions leave payrolls looking far weaker than before.
• Private payrolls ex-healthcare fell by 16K per month on average in the three months to July.
• The stable unemployment rate reflects young people deferring active job search; hidden slack is mounting.

Samuel TombsUS

1 August 2025 US Monitor Consumers' spending to stagnate as real incomes flatline

• The meager growth in consumers’ spending in the first half of this year probably will continue in the second.
• Modest gains in nominal incomes will struggle to keep up with the post-tariff jump in consumer prices.
• We see core PCE inflation hitting 3¼% by year-end, but expect the Fed to prioritize the softening labor market.

Samuel TombsUS

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