10 Things You Need To Know: October 1, 2024
Key data releases this week include: JOLTS Jobs Openings (Tue), ISM Manufacturing (Tue), factory orders (Thu), ISM Services (Thu), and nonfarm payrolls (Fri).
Haver
September 24, 2024
U.S. house prices inched up 0.1% m/m in July after being virtually unchanged in both June and May, according to the Federal Housing Finance Agency (FHFA) House Price Index. The July m/m increase was the first since April’s 0.3%. The year-on-year rate of increase decelerated to 4.5% in July, the lowest since June 2023.
Haver
September 26, 2024
The Pending Home Sales Index, based on sales contract signings, rose 0.6% (-3.0% y/y) to 70.6 in August. The gain came after an unrevised 5.5% decline in July to 70.2, according to the National Association of Realtors (NAR). During June, pending home sales rose 4.8%.
Haver
September 27, 2024
Personal consumption expenditures (PCE) increased 0.2% (5.2% y/y) in August, after a 0.5% rise during July. A 0.3% increase had been expected in the Action Economics Forecast. Personal income rose 0.2% (5.6% y/y) in August.
Trading Economics
September 27, 2024
The personal consumption expenditure price index in the US increased 0.1% month-over-month in August 2024, after a 0.2% rise in July and in line with expectations. The core PCE index, excluding food and energy, also rose 0.1%, below 0.2% in July and forecasts of 0.2%. Annually, the PCE inflation rate fell to 2.2%, below expectations of 2.3%. The core rate edged up to 2.7% from 2.6%, matching forecasts.
Financial Times
September 29, 2024
Economist are expecting the European Central Bank to cut rates by 0.25% in October, earlier than previously expected, due to weak inflation data in France and Spain and a low Eurozone Purchasing Managers’ Index. The latest data is “simply too weak to not change the October meeting outlook,” said Piet Haines Christiansen at Danske Bank.
Bloomberg
September 27, 2024
The PBOC formally cut its seven-day reverse repo rate — now its key policy rate — by 20 basis points to 1.50% on Friday. It also reduced the reserve requirement ratio by 50 bps, bringing the average RRR for banks down to 6.6%. That could free up about 1 trillion yuan for lending. In addition to monetary easing, policies announced by the Politburo will also be implemented soon — from fiscal stimulus to support for the housing market, employment and the stock market.
Barron’s
September 30, 2024
Trillion-dollar deficits loom as far as the eye can see. According to the outlook of the nonpartisan Congressional Budget Office, the deficit is projected to continue to exceed 5% of GDP for the rest of the decade, climbing to 6.1% by 2034. At that point, the U.S. could hit its sustainable gross debt limit, at over 150% of GDP.
Bloomberg
September 30, 2024
Federal Reserve Chair Jerome Powell said in a speech the central bank will lower interest rates “over time,” while again emphasizing that the overall US economy remains on solid footing. “This is not a committee that feels like it’s in a hurry to cut rates quickly,” Powell said. “Ultimately, we will be guided by the incoming data. And if the economy slows more than we expect, then we can cut faster. If it slows less than we expect, we can cut slower.”
Bloomberg
September 30, 2024
President Joe Biden said Sunday he wouldn’t intervene in any dockworkers strike. However, the economic pressure for federal intervention will only build if important gateways are paralyzed for more than a few days. Oxford Economics estimated that a strike would cost the US economy $4.5 billion to $7.5 billion a week — a hit to gross domestic product that would be reversed after it’s over and shipments resume.