Weekly economic review & outlook
Consumers holding up to crosswinds
SEP. 03, 2019
You Need to Know
Week in review
Core inflation still near recent low
The core PCE rose by 0.2 percent for July but the 12-month change in the index remained at 1.6 percent, still below the Fed’s inflation goal.
Equities back into the green last week
Domestic stock indices ended a rough and volatile August on the upswing, even as the yield curve continues to be modestly inverted.
Job growth expected to slow further for August
The slowing trend for job gains this year should continue in August while the unemployment rate should be unchanged.
Manufacturing survey should edge higher
Trade disruptions have taken a toll on manufacturing growth but the ISM survey for the sector should tick higher for August.
While the business sector (especially for firms with exposure to tariffs) is struggling with uncertainty and escalating trade disruptions, the U.S. consumer has so far weathered the storm well. Personal consumption expenditures for July (led by solid retail spending) rose by 0.6 percent to help set up the economy for likely solid growth in the third quarter. Moreover, the three-month annualized growth rate in real spending (adjusted for inflation) was a strong 4.2 percent.