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Weekly economic review & outlook Fed tapering is coming soon; tightening later

September 27, 2021

You Need to Know

Week in review

Homebuilders’ survey little changed

The NAHB survey moved slightly higher for September despite lingering concerns about input prices/availability and labor shortages.

Total home sales fell for August

Existing home sales declined while new home sales rose modestly. Both remain at elevated levels.

Week Ahead

Forecasts

Modest core inflation and another rise in personal income/ consumer spending likely

A smaller than expected increase in the CPI suggests modest core PCE inflation for August, while consumer spending likely saw another healthy gain with personal income up again.

A small stepdown expected for manufacturing growth

While still at levels signaling solid growth, the ISM manufacturing survey is projected to slip modestly as growth continues to be held back by supply chain and labor supply issues.

Although monetary policy was left unchanged last week, the Federal Reserve set the table for changes before the end of the year. During his post-FOMC meeting comments, Fed Chair Jay Powell stated that “the substantial further progress test for employment is all but met.” Economic data continued to show a mixed picture with home sales and flash PMIs showing a deceleration of activity but remaining at still robust levels.

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