10 Things You Need To Know: September 19, 2023
Key data releases this week include: NAHB Housing Market Index (Mon), housing starts (Tue), FOMC rate decision (Wed), existing home sales (Thu), and leading economic indicators (Thu).
Haver
September 13, 2023
The Consumer Price Index rose 0.6% in August following two months of 0.2% increase. The rise matched expectations in the Action Economics Forecast Survey. The 3.7% y/y rise increased from 3.2% in July. Prices excluding food & energy rose 0.3% last month, also following two months of 0.2% increase. The 4.3% y/y increase was the lowest since September 2021.
Haver
September 14, 2023
Retail sales increased 0.6% (2.5% y/y) during August following a 0.5% July gain. June’s increase was revised to 0.2% from 0.3%. A 0.2% August increase had been expected in the Action Economics Forecast Survey. Sales in the retail group, which excludes autos, building materials, gasoline & restaurants, rose a minimal 0.1% last month (3.6% y/y) after increasing 0.7% in July.
Haver
September 14, 2023
The Producer Price Index for final demand rose a larger-than-expected 0.7% m/m (1.6% y/y) in August following an upwardly revised 0.4% monthly gain in July. A 0.4% m/m increase had been expected by the Action Economics Forecast Survey. This was the largest monthly increase in the overall PPI since June 2022. The PPI excluding food, energy and trade services prices rose 0.3% (3.0% y/y), matching an upwardly revised 0.3% m/m increase in July.
Capital Economics
September 14, 2023
Thursday’s 25bp rate hike by the ECB probably brings its tightening cycle to an end. Given our view that underlying inflation will ease only gradually even though the euro-zone is heading for a recession, we think policymakers will leave rates at this record level until September next year.
FT
September 11, 2023
The European Commission has downgraded its growth forecasts for the EU economy, with projections of 0.8% growth in 2023 and 1.4% in 2024, citing persistent inflation and reduced consumer spending. Germany’s economy is expected to contract by 0.4% this year, while concerns over eurozone inflation may impact the European Central Bank’s upcoming rate decision.
Barron’s
September 18, 2023
Even if the UAW strike expanded to include all roughly 150,000 members for a full month, it would only result in a 0.2% drag on the U.S. economy during the third quarter, according to Joe Brusuelas, RSM’s chief economist. He points out that the strike will likely cause spillover effects in industries that support domestic vehicle manufacturing, such as petrochemicals, steel, and glass, as well as to suppliers that produce component parts, electronics, and software.
Barron’s
September 18, 2023
This will be a busy week for central banks around the globe. In addition to the Fed, the Bank of England, Sweden’s Riksbank, and the Swiss National Bank will all announce their monetary-policy decisions. With European inflation proving to be stubborn, those central banks are expected to raise their key interest rates by a quarter of a percentage point. In contrast, the Bank of Japan is seen keeping its target rate unchanged at negative 0.1%.
Barron’s
September 18, 2023
Among most major economies, workforce participation among females ages 25-54 has surged faster than men of that same age range. This could suggest that flexible work is making it easier for this cohort of women to juggle work and family. Moreover, some early research suggests that it could be contributing to higher birthrates. A rising and more active working-age population has positive implications for long-term growth and equity-market returns.
Bloomberg
September 15, 2023
Home purchases across the US are getting canceled at the highest rate in almost a year as rising borrowing costs weigh on buyers. Nearly 60,000 deals to purchase homes fell through in August, according to a report released Friday by Redfin Corp. That’s equal to roughly 16% of homes that went under contract last month, the biggest share of cancellations since October.