- Even if margin re-compression crushes inflation over the next year, wages pose a medium-term threat...
- ...That’s why the Fed is so determined to drive a weakening in the labor market.
- But policymakers’s fears of sustained wage-driven inflation likely overstate the danger.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Core PPI inflation is falling fast, despite upward pressure from a technical issue in August.
- Core retail sales likely rose at a decent pace in August, though the margin of error is bigger than usual.
- A calendar quirk probably will constrain reported manufacturing output in August.
Ian Shepherdson (Chief Economist and Founder)U.S.
- Core inflation clearly is slowing, but August brings risks in both directions; vehicle prices are wild.
- Airline fares likely plunged, but hotel room rates probably jumped, and rents are still rising strongly.
- Small business sentiment likely rebounded as gas prices dropped, and selling prices probably fell.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The Homebase data point to another solid payroll gain, but the August seasonal is a wild card.
- Wage growth appears to be picking up slightly, but we need more data to be sure.
- The ISM has stabilized, and the supply-chain measures point to much lower inflation.
Ian Shepherdson (Chief Economist and Founder)U.S.
- The ADP employment report returns today, with new methodology; forecasts are, therefore, a joke.
- The number of JOLTS job openings remains close to the peak, but are the data believable?
- Consumer confidence is rebounding as falling gas prices boost people’s spending power.
Ian Shepherdson (Chief Economist and Founder)U.S.
Key regional surveys now show that supply conditions have improved enough to push down margins.
The upturn in jobless claims since the spring is overstated by seasonal problems; the labor market is fine.
Capital goods orders are rising at a decent, steady pace, but inflation is offsetting the gains, for now.
Ian Shepherdson (Chief Economist and Founder)U.S.
Chair Powell likely will reiterate that the Fed is now data-dependent; 75bp is not certain for September.
Student loan forgiveness will not materially boost growth or inflation, or threaten the public finances.
Imports appear to be falling quite quickly; a drop in the trade deficit will boost Q3 GDP growth.
Ian Shepherdson (Chief Economist and Founder)U.S.
