10 Things You Need to Know: July 2, 2024
Key data releases this week include: ISM Manufacturing (Mon), JOLTS Jobs Openings (Tue), factory orders (Wed), ISM Services (Wed), FOMC meeting minutes (Wed), and nonfarm payrolls (Fri).
Haver
July 1,2024
The ISM Purchasing Managers Index of activity in the manufacturing sector fell to 48.5 during June after declining to 48.7 in May from 49.2 in April. The index peaked at 64.0 in March 2021. A reading of 49.1 for last month had been expected in the Action Economics Forecast Survey.
Haver
June 25, 2024
U.S. house prices were up 0.2% m/m in April after being virtually unchanged in March, according to the Federal Housing Finance Agency (FHFA) House Price Index. The latest reading was the 18th m/m gain in 20 months. The year-on-year rate of increase eased to 6.3% in April, well below a high of 18.9% in February 2022.
Haver
June 27, 2024
The Pending Home Sales Index, a forward-looking measure of home sales based on contract signings, fell 2.1% m/m after an unrevised 7.7% drop in April. The May PHSI at 70.8 was the lowest level on record. The year-on-year rate of decline was at -6.6% in May. The PHSI has fallen 43.4% since its August 2020 peak of 128.0.
Haver
June 28, 2024
The PCE chain price index was unchanged in May following three consecutive 0.3% increases. The 2.6% y/y rise compares to its 7.1% y/y peak in June 2022. The price index excluding food and energy edged 0.1% higher, also following three consecutive 0.3% increases. The 2.6% y/y increase was the weakest since March 2021 and below the 5.6% peak in February 2022.
Capital Economics
June 30, 2024
The preliminary results of the first round of voting are broadly in line with the final opinion polls, showing that Emmanuel Macron’s coalition has lost out to both the left and right. But a lot could change in the second round on 7th July, and high voter turnout makes the final result even harder to predict. So, uncertainty about the economic and fiscal outlook will remain high.
Capital Economics
June 25, 2024
Prime Minister Modi begins his third term with a weakened mandate, but an economy that is primed to grow by 6.5-7% per year between 2024 and 2026. That would put India on course to become the world’s third largest economy within the next couple of years. Meanwhile, with inflation grinding back down to the RBI’s 4% target, we think there is scope for more rate cuts this year than the consensus is expecting.
Barron’s
July 1, 2024
Global shipping is at least five times as expensive as it was in 2023, with container rates from Asia to Europe jumping to about $8,000 per 40-foot container, up from an average of $1,500 last year. The big reason: continuing Houthi attacks in the Red Sea. In the U.S., a strike by East and Gulf Coast dockworkers looms; the current contract expires at the end of September. The shipping surge could also boost inflation just as numbers have been trending in the right direction.
Oxford Economics
June 28, 2024
As expected, prices were unchanged in May, and the gain in the core PCE deflator was the smallest since 2020, driving headline and core inflation down to 2.6%. Fed officials will want to see a few more encouraging inflation reports before beginning to cut interest rates, but they will not wait until inflation falls to their 2% target. We still expect the Fed to begin cutting rates in September, and once per quarter thereafter.
CNBC
June 26, 2024
A study by Prudential found that 67% of 55-year-olds surveyed said they fear they will outlive their savings, compared with 59% of 65-year-olds and 52% of 75-year-olds. To that point, with just a decade until retirement, 55-year-old Americans have less than $50,000 in median retirement savings, the study reported. Those factors could lead to a rise in “silver squatters” who are forced to rely on family for housing and financial support.