Economy
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Economy coverage, page 3
July Retail Sales Fell 0.6%. Read the Footnote Before You Read the Headline.
The Census Bureau's advance estimate put July retail and food services sales at $763.6 billion, down 0.6% from June against forecasts for a small gain. The asterisk everyone will point at is attached to the June revision, not to July's decline.
Friday's Consumer Doubleheader: Retail Sales at 8:30, Sentiment Stuck Near 55 at 10:00
July advance retail sales and the preliminary August University of Michigan sentiment index land ninety minutes apart, and the forecasting services cannot agree on what the second one should print. The gap between what households say and what they buy is the number that matters into the Sept. 15-16 FOMC.
The PPI Headline Cooled. The Core Didn't. The Fed's September Argument Is Still Live
July producer prices were unchanged against expectations for a 0.2% rise, and traders cut the odds of a September rate increase. But the measure that strips out the noisiest components accelerated to 0.4% on the month, and two Fed officials spent Thursday arguing opposite sides of the same question.
Low Layoffs, No Hiring: The Split Labor Market the Fed Has to Price
Weekly jobless claims rose to 209,000 on Thursday but remain historically low, even as July payrolls fell and 103,000 jobs vanished from prior months in revision. The two series are telling opposite stories, and a Federal Reserve debating a rate hike has to reconcile them.
The bond market barely moved on CPI, and September is still an open question
The 10-year note finished Wednesday essentially where it started, and futures pricing for the September 16 FOMC still spans roughly 37% to 45% odds of a quarter-point increase depending on which gauge you read.
Thursday's producer price report tests whether June's energy relief was a one-off
June's PPI fell 0.3% almost entirely because gasoline collapsed. Crude has since climbed back toward $90, and economists expect wholesale prices to turn positive again in the July data due at 8:30 a.m. ET.
Energy does the inflation work while core prices quietly cool
July's consumer price data showed a 3.4% headline rate propped up almost entirely by fuel and airfares, leaving the Fed's hawkish minority with a thinner case for a September increase.