10 Things You Need To Know : September 6, 2023
Key data releases this week include: factory orders (Tue), ISM Services Index (Wed), Beige Book (Wed), trade balance (Wed), and consumer credit (Fri).
Haver
September 1, 2023
Nonfarm payrolls increased 187,000 during August (2.0% y/y) after rising 157,000 in July and 105,000 in June. Expectations had been for a 160,000 rise in the Action Economics Forecast Survey. Average hourly earnings edged 0.2% higher in August after two months of 0.4% increases. The 4.3% y/y earnings increase remains below a high of 5.9% y/y in March 2022. A 0.3% August increase had been expected.
Haver
August 30, 2023
In the second estimate, real GDP grew 2.1% q/q (SAAR) in the second quarter, down from the 2.4% advance estimate, but still above most estimates of trend growth (1-3/4%-2%). The Action Economics Forecast Survey had expected no revision to real GDP growth for Q2. Slower growth in business spending on equipment was the primary factor behind the downward revision.
Haver
September 1, 2023
The ISM U.S. manufacturing PMI increased to 47.6 in August from 46.4 in July and 46.0 in June. The PMI indicated that the U.S. manufacturing sector contracted for the 10th successive month but at a slightly less severe pace compared to July. A reading of 47.0 had been expected in the Action Economics Forecast Survey for August.
Haver
August 29, 2023
U.S. house prices rose 0.3% m/m in June after rises of 0.7% in May (unrevised) and 0.8% in April (+0.7% previously), according to the Federal Housing Finance Agency (FHFA) House Price Index. The June reading was the seventh straight monthly gain to the highest index level on record (405.81). The year-on-year rate of increase quickened to 3.1% in June from 2.9% in May but decelerated from a 19.1% high in February 2022.
Haver
August 30, 2023
The Pending Home Sales Index from the National Association of Realtors (NAR) rose 0.9% (-14.0% y/y) to 77.6 during July following a minimally revised 0.4% June rise. The index stood 39.4% below its August 2020 high of 128.0
Haver
June 30, 2023
Personal consumption expenditures (PCE) increased 0.8% during July (6.4% y/y) following a 0.6 June rise. A 0.7% gain had been expected in the Action Economics Forecast Survey. Personal income rose 0.2% in July (4.6% y/y) after increasing an unrevised 0.3% in June. A 0.3% rise had been expected. The PCE chain price index rose 0.2% (3.3% y/y) last month, the same as in June. The index excluding food & energy rose 0.2% (4.2% y/y), also the same as in June.
Barron’s
September 4, 2023
The Fed’s 12 regional banks, which used to make a lot of money, are now running big collective deficits. That’s because they’re paying more than 5% on trillions of dollars that they’ve borrowed from money-market funds and other financial institutions, while their own portfolios remain loaded with low-yielding mortgage and Treasury securities that they bought during the days of near-zero interest.
Barron’s
September 4, 2023
Rising interest rates haven’t had any discernible impact on corporate profitability. Since the financial crisis, companies haven’t reduced their overall debt in the same way households have, but the tenor of that corporate debt is different. Specifically, companies now rely less on short-term borrowings such as commercial paper or bank loans. Instead, they are turning to public and private credit instruments with longer maturities and fixed terms.
Bloomberg
August 31, 2023
Federal Reserve Bank of Atlanta President Raphael Bostic has warned policymakers to avoid overly tight monetary policy that could harm the US labor market. Bostic, though not a voting Fed member this year, suggested that while policy is suitably restrictive, a cautious approach is needed to prevent excessive tightening and unnecessary economic pain, urging the central bank to maintain patience and higher rates to ensure inflation reaches its target.