10 Things You Need To Know: August 27, 2024
Key data releases this week include: durable goods orders (Mon), FHFA House Price Index (Tue), consumer confidence (Tue), Q2 GDP revision (Thu), pending home sales (Thu), consumer sentiment (Fri), personal income and spending (Fri), and PCE Deflator (Fri).
Haver
August 19, 2024
The U.S. Leading Economic Index fell 0.6% (-5.2% y/y) during July following a 0.2% June decline. This marks the fifth consecutive negative reading. The index has been moving lower since a peak in December 2021. A 0.4% July shortfall had been expected in the Action Economics Forecast Survey. Five of ten components contributed negatively to the overall index in July.
Haver
August 22, 2024
Sales of existing homes rose 1.3% during July (-2.5% y/y) to 3.950 million units (SAAR) from 3.90 million in June. Sales had fallen for four consecutive months before the July increase. The Action Economics Forecast Survey expected July sales of 3.91 million units. The median price of all existing homes (NSA) eased 1.0% in July (+4.2% y/y) to $422,600.
Financial Times, Reuters
August 21, 2024, August 22, 2024
Minutes from the Federal Reserve’s July meeting show that some officials saw a plausible case for a rate cut due to progress with inflation and rising unemployment. However, the committee voted unanimously to keep rates steady, with a majority noting that further data would likely support easing policy at the next meeting.
Bloomberg
August 26, 2024
Canada will impose new tariffs on Chinese-made electric vehicles, aluminum and steel, lining up behind western allies and taking steps to protect domestic manufacturers. The government announced a 100% levy on electric cars and 25% on steel and aluminum.
Barron’s
August 26, 2024
The U.S. debt is over $35 trillion. For the fiscal year ending in September, the deficit will narrow by $130 billion, to just under $1.9 trillion. Narrowing sounds good, but that’s still 6.7% of nominal GDP. We’re growing the debt more than twice as fast as we’re growing the economy. Yearly interest on the debt is already surpassing military spending, and over the coming decade, interest is expected to double to $1.7 trillion. That will be like having a second Medicare.
Barron’s
August 26, 2024
Key parts of the 2017 Tax Cuts and Jobs Act, a hallmark of the Trump era, expire next year, including lower marginal income-tax rates on most earners. Kamala Harris would extend those cuts below the $400,000 level. She would also impose new forms of wealth taxes—just as Biden had planned. Like him, she would propose to raise the corporate tax rate from 21%, where it was set in 2017, to 28%.
Financial Times, Wall Street Journal
August 25, 2024, August 23, 2024
Federal Reserve Chair Jerome Powell said that “the time has come for policy to adjust,” although he noted that “the timing and pace of rate cuts” will depend on multiple factors, including economic data and risks. Speaking at the Fed’s annual gathering in Jackson Hole, Wyo., Powell noted that inflation has decreased and “the labor market is no longer overheated.”
Bloomberg
August 23, 2024
Federal Reserve Bank of Atlanta President Raphael Bostic said it’s possible that more than one interest rate cut may now be needed by year-end, shifting his view in the wake of data showing falling inflation and a slowing labor market. The Atlanta Fed president said that “inflation has moved a lot faster than I anticipated” and the labor market has had “a big change,” with unemployment rising, though it is still “solid,” he said.
Financial Times
August 18, 2024
More than half of Fortune 500 companies see AI as a risk, according to Arize AI. This marks a significant increase from 9% in 2022. Companies highlight concerns such as competition, ethical issues, and financial uncertainties. Only 33% of companies saw generative AI as an opportunity.