10 Things You Need To Know: August 1, 2023
Key data releases this week include: JOLTS Jobs Openings (Tue), ISM Manufacturing (Tue), Q2 nonfarm productivity (Thu), factory orders (Thu), ISM Services (Thu), and nonfarm payrolls (Fri).
Haver
July 27, 2023
Real GDP grew 2.4% (SAAR) during Q2’23 following a 2.0% rise in Q1. The gain marks the fourth consecutive quarter of growth. GDP grew 2.6% y/y, the strongest four quarter advance since Q1’22. A 1.9% gain for Q2 was expected in the Action Economics Forecast Survey.
Haver
July 24, 2023
U.S. house prices rose 0.7% m/m in May after rises of 0.7% in April and 0.6% in March, according to the Federal Housing Finance Agency (FHFA) House Price Index. The May reading was the fifth consecutive monthly gain to the highest index level on record. The year-on-year rate of increase decelerated to 2.8% in May from 3.1% in April; it was the smallest y/y rate since May 2012 and significantly down from a 19.1% high in February 2022.
Haver
July 28, 2023
Personal consumption expenditures (PCE) increased 0.5% during June (5.4% y/y) following a 0.2% May rise, revised from 0.1%. A 0.4% gain had been expected in the Action Economics Forecast Survey. Personal income rose 0.3% (5.3% y/y) after increasing 0.5% in May. The PCE chain price index rose 0.2% (3.0% y/y) last month after a 0.1% May gain. The index excluding food & energy rose 0.2% (4.1% y/y), the smallest increase since November and down from the 0.6% August high.
Financial Times
July 27, 2023
The European Central Bank on Thursday raised its benchmark deposit rate by 0.25 percentage point to 3.75%, its highest level since just after the euro launched in 2001. This marked the ECB’s ninth consecutive hike, and market participants are increasingly betting this will be its last one.
Financial Times
July 25, 2023
Eurozone banks have seen a record drop in business loan demand and are urging the European Central Bank to abandon interest rate hikes. The central bank has signaled it will raise rates by a quarter percentage point this week, though negative macro data and a gloomy economic outlook could prevent it from imposing another rate increase in September.
Capital Economics
July 28, 2023
China’s reopening recovery is struggling for momentum and quarter-on-quarter growth will be subdued for the rest of the year. But with policymakers likely to step up support soon, the economy should still make some headway.
Financial Times
July 28, 2023
The Bank of Japan has surprised markets by offering to buy 10-year Japanese government bonds at 1% yield, widening the trading band on long-term yields, while maintaining a “reference” level of 0.5%.This move triggered confusion about the central bank’s easing policy, but Governor Kazuo Ueda clarified that they are not ready to allow yields to move freely and will intervene if the 10-year yield exceeds 1%.
Barron’s
July 31, 2023
Deloitte estimates that the U.S. will face a shortage of 70,000 to 90,000 semiconductor workers over the next few years. McKinsey forecasts that the U.S. could be short 300,000 engineers and 90,000 skilled technicians by 2030.
Barron’s
July 31, 2023
With about half of the companies reporting, earnings are up about 3% from the previous year on average, lower than the 9% average growth reported in the second quarter of 2022. Yet things look just fine, with about 80% of the companies reporting better-than-expected earnings. While the majority typically beat earnings, that’s a better rate than last quarter, when just under 80% did, and one year ago, when just under 75% did.