We expect a 2.4% pace of growth with modest downside risk to our forecast when gross domestic product for the second quarter is released on Thursday. The two main swing factors are inventories, which should be quite strong and are likely to make overall top-line economic activity appear stronger than ... READ MORE >
inflation
Strong employment enables consumers to maintain spending
Strong employment has sustained consumer spending levels, Commerce Department data for June released on Tuesday shows. Retail sales rose 0.3% to 0.4% in the month, after adjusting for inflation, driven by robust employment despite consumers’ depleted savings and high interest rates. As retailers look ... 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 >
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 >
Fed’s key inflation gauge continues to cool in May as income increases by 0.5%
The Federal Reserve’s preferred measure of inflation continued to ease in May as the personal consumption expenditures Index remained unchanged on the month and rose by 2.6% from a year ago. The core PCE index, which excludes the more volatile food and energy components, advanced by 0.1% and increased ... READ MORE >
Spending cools more than expected as Fed contemplates rate cuts
American consumers pulled back in April as a sign of elevated interest rates weighing further on overall demand as fiscal spending from the pandemic wanes. The material slowdown of the labor market in April was also a key factor with income growth essentially unchanged on an inflation-adjusted ... READ MORE >
Forecasts show softer April PCE inflation
Details from April’s consumer price index and producer price index reports this week implied a slightly softer month for the personal consumption expenditures index. We think the top-line PCE inflation will most likely come in at 0.25% for April, down from 0.30% in March, while the core index will slow ... READ MORE >
Retail demand shows weakness, leading to first inflation dip in 6 months
In a noteworthy turn, core goods prices have experienced a continued decline, contributing to the first dip in inflation in six months, according to April’s consumer price index. April's retail sales data paints a picture of stagnation, hinting at a weakening consumer base grappling with high interest ... READ MORE >
CPI resumes disinflationary trend in April amid weakened retail sales
The drop in April’s consumer price index was a much-needed step in the right direction in the Federal Reserve's effort to tame inflation and provided hope for potential rate cuts this year. Retail sales, in another key report released on Wednesday, indicated a much weaker April, explaining the extended ... READ MORE >
Producer price offers mixed result ahead of CPI release
The producer price index increased by 0.5% in April, above estimates, as both goods and services prices accelerated, according to Bureau of Labor Statistics data released on Tuesday. The increase, however, was offset by a downward revision to March’s number, from a 0.2% increase to a 0.1% decline. That ... READ MORE >