10 Things You Need to Know: September 17, 2024
Key data releases this week include: NAHB Housing Market Index (Tue), industrial production (Tue), retail sales (Tue), housing starts (Wed), FOMC rate decision (Wed), existing home sales (Thu), and leading economic indicators (Thu).
Haver
September 11, 2024
The Consumer Price Index increased 0.2% during August, the same as in July. The gain matched expectations in the Action Economics Forecast Survey. The y/y increase fell to 2.5% from 2.9% in July. Prices excluding food & energy rose 0.3% last month. A 0.2% rise had been expected. Core consumer prices increased 2.1% (AR) during the last three months, up 3.2% y/y.
Haver
September 12, 2024
The Producer Price Index rose 0.2% (1.7% y/y) during August after holding steady in July. The rise matched expectations in the Action Economics Forecast Survey. Producer prices excluding food, energy & trade services rose 0.3% (3.3% y/y). The PPI excluding food & energy rose 0.3% (2.4% y/y) after falling 0.2% in July. A 0.2% rise had been expected.
Haver
September 10, 2024
The NFIB Small Business Optimism Index declined to 91.2 during August after rising to 93.7 in July. The index held steady y/y but has improved from a March low of 88.5. Eight of the 10 index components declined last month. The NFIB Small Business Uncertainty Index increased to 92 in August. It remained higher than its recent low of 65 in November 2023.
NYT, FT
September 12,2024, September 12, 2024
The European Central Bank has cut interest rates by 0.25% to 3.5% in response to falling inflation and economic risks in the Eurozone. The decision was unanimous, a shift from the divided vote in June. The ECB’s action comes as inflation hits a three-year low and industrial output declines in Germany and Italy. Future rate cuts are anticipated, though not immediately.
Bloomberg
September 13, 2024
China will raise the retirement age for the first time since 1978, a move that could stem a decline in the labor force but risk angering workers already wrestling with a slowing economy. Men will retire at 63 instead of 60. Women will retire at 55 instead of 50 for ordinary workers, and 58 instead of 55 for those in management positions.
Barron’s
September 16, 2024
The United States’ interest expense is running at over $1 trillion a year and exceeds the military budget. The implications of that go beyond the budget. Economic historian Niall Ferguson observed, “Any great power that spends more on debt service than on defense will not stay great for very long. True of Habsburg Spain, true of ancient régime France, true of the Ottoman Empire, true of the British Empire, this law is about to be put to the test by the U.S. beginning this very year.”
Barron’s
September 16, 2024
The country needs up to seven million new houses to alleviate shortages, yet builders are only putting up around 850,000 single-family units a year at their current pace. Even if construction ramped up to 1.1 million units a year, it would take until at least 2029 to reduce the country’s housing shortage.
Barron’s
September 12, 2024
Ed Hyman, chairman of Evercore ISI, just pivoted to a soft landing from a hard one. Evercore offered 10 reasons for the change. They range from unemployment claims remaining low, plentiful liquidity, slowing inflation giving incomes a boost, the Federal Reserve’s looming rate cut, and the continued build out of artificial intelligence, among others.
Bloomberg
September 16, 2024
Three Democratic senators urged Federal Reserve Chair Jerome Powell and fellow policymakers to aggressively cut the central bank’s benchmark interest rate, including by 75 basis points this week, to protect the US economy from potential harm. “If the Fed is too cautious in cutting rates, it would needlessly risk our economy heading towards a recession,” Sens. Elizabeth Warren, Sheldon Whitehouse and John Hickenlooper said in a letter sent Monday to Powell.