Summary
United States: Hot Economic Data Accompanies the Heart of Summer
- The U.S. economic data released this week were almost universally strong. Jobless claims dipped lower, the housing market data continued to surprise to the upside and there were signs of life in business equipment spending.
- Next week: Construction Spending (Mon.), ISM Indices (Mon. & Thur.), Employment (Fri.)
International: Global Inflation Continues to Decelerate
- This week’s data point to an ongoing improvement in global inflation trends, though perhaps not quite as quickly as might ideally be hoped. The Eurozone CPI slowed to 5.5% year-over-year, but core inflation actually ticked higher to 5.4%. Canada’s May headline CPI slowed to 3.4% and Australia’s May headline CPI slowed to 5.6%, though in both of those countries the slowing in core inflation was less pronounced.
- Next week: Japan Tankan Survey (Mon.), RBA Policy Rate (Tue.), Mexico CPI (Fri.)
Interest Rate Watch: Higher for Longer
- Recent policy actions and comments by central bank officials have convinced market participants that rates are heading higher and that they will remain elevated for longer than previously thought.
Topic of the Week: Immigration Flows Have Fully Rebounded After the Pandemic
- After essentially halting during the pandemic, U.S. immigration levels have rebounded. Immigration flows as a percentage of annual population growth rose above its pre-pandemic 10-year average in 2022, providing a boost to the population and labor force.
