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

PM Datanote: US FOMC Minutes, June 18 Meeting

Committee is more clearly split; weaker labor market to tip the balance by September.

Oliver Allen (Senior US Economist)US

11 July 2025 US Monitor Immigration probably will continue to add meaningfully to labor supply

• President Trump’s policies will slow the flow of immigration into the US, but not halt it entirely.
• The idea that a big migrant exodus from the labor market is already underway is at odds with the data.
• We continue to think labor demand will grow more slowly than supply, lifting the unemployment rate.

Oliver Allen (Senior US Economist)US

PM Datanote: US NFIB Small Business Optimism Survey, June

Plunging response rate raises big questions about reliability.

Oliver Allen (Senior US Economist)US

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

PM Datanote: US ISM Services Survey, June

A big jump in services inflation still looks unlikely.

Oliver Allen (Senior US Economist)US

PM Datanote: US ADP Employment, June

Implausible sector breakdown highlights ADP's uselessness.

Oliver Allen (Senior US Economist)US

PM Datanote: US ISM Manufacturing Survey, June

Supply-side disruptions giving way to weak demand.

Oliver Allen (Senior US Economist)US

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

PM Datanote: US Advance Economic Indicators, May

GDP on course for a misleading jump in Q2.

Oliver Allen (Senior US Economist)US

PM Datanote: US New Home Sales, May

IMay slump brings sales back to reality.

Oliver Allen (Senior US Economist)US

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

PM Datanote: US Consumer Confidence / Chair Powell Monetary Policy Testimony

Inflation expectations dropping back, labor market still weakening.

Oliver Allen (Senior US Economist)US

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