The rebound of labor productivity in the second quarter is another sign of why the economy will continue to be on strong footing despite growing concerns over a labor market slowdown. The second quarter’s labor productivity growth was 2.3%, the Labor Department reported on Thursday. Not only did the ... READ MORE >
Job openings exceed forecasts as layoffs and quits reach multiyear lows
Job openings continued to point to strong labor demand, staying above forecast at 8.18 million in June. May’s number was also revised up to 8.23 million, according to Bureau of Labor Statistics data released on Tuesday. The data supported our forecast of another strong month of job gains in July when ... READ MORE >
U.S. July employment report to show a gain of 200,000 jobs
Our provisional forecast for the July jobs report when it is released on Friday implies a net increase in total employment of 200,000 jobs with an easing in the unemployment rate from 4.1% to 4%. In addition, we forecast a 0.3% increase in average hourly earnings, which should translate to a 3.7% ... READ MORE >
PCE inflation continues to ease in June as income and spending gain
The Federal Reserve’s preferred measure of inflation continued to ease in June, reaffirming that the central bank has achieved enough price stability to reduce its policy rate at its September meeting, which has been our baseline forecast for a number of months. Top-line inflation in the personal ... READ MORE >
Retail sales were unchanged in June but still exceed forecasts
The upside surprises in retail sales that were announced on Tuesday proved that the significant slowdown in inflation in the past two months has been a major tailwind for consumer spending, not the other way around as many had anticipated. After adjusting for inflation, sales volume for June, which has ... READ MORE >
Producer prices rise 0.2%, but signs still point to lower inflation in Fed’s key gauge
Despite the producer price index coming in stronger than expected on Friday, the Federal Reserve's most important measure of inflation, the personal consumption expenditures index, should remain near zero in June when it is released on July 26. Read more of RSM's insights on inflation, the economy and ... READ MORE >
As economy cools, Fed needs to cut rates
Growth, inflation and hiring in the United States are all cooling toward a more sustainable pace, which will most likely define the second half of the year as the Federal Reserve gets ready to reduce its restrictive policy rate. While the fiscal tailwinds that have bolstered the economy are ... READ MORE >
Job openings rise as the labor market marches toward normalization
Labor demand remained strong in May, bolstering hirings during the month, the Bureau of Labor Statistics reported on Tuesday. Job openings edged up unexpectedly to 8.14 million from a downwardly revised 7.92 million in April. The increase in job openings is in line with our forecast for another strong ... READ MORE >
Manufacturing sector weakens in June
Manufacturing sentiment fell into contraction in June after only three months of barely growing, the Institute for Supply Management reported on Monday. As the Federal Reserve continues to hold interest rates at an elevated level, demand for manufacturing goods has been dampened for most of the ... READ MORE >
June jobs report preview: Beveridge curve implies a balanced labor market as hiring cools
The labor market and inflation have finally come into balance. As Mary Daly, president of the Federal Reserve Bank of San Francisco, said recently, the inflection point where unemployment risks could trump inflation risks “is getting nearer.” Now, the risk is that as the economy cools, hiring will slow ... READ MORE >