Summary
United States: A String of Upside Surprises, but Growth is Slowing in the U.S.
- Retail sales, housing starts and industrial production all surprised to the upside this week. Yet, an uptick in initial jobless claims was a reminder that conditions in the labor market are cooling, which sets the U.S. economy on a path of slower growth in the second half of the year.
- Next week: Existing & New Home Sales (Tues. and Wed.), GDP (Thurs.), Personal Income and Spending (Fri.)
International: China Is Now on Pace To Miss Its Annual Growth Target
- This week, GDP data downshifted and pricing pressures subdued in China, reflecting sluggish activity; against this backdrop, we continue to expect that the People’s Bank of China (PBoC) will ease monetary policy during the rest of 2024 and throughout 2025.
- Next week: Central Bank of Turkey Policy Rate (Tues.), Bank of Canada Policy Rate (Wed.), Eurozone PMIs (Wed.)
Interest Rate Watch: Treasury Yields: Along for the Ride
- Through the first half of the year, the incoming data have whipsawed economists, and financial markets have come along for the ride. The see-sawing in Treasury yields over the first half of the year has been all the more notable as the policy rate has remained unchanged; the repricing has been primarily driven by expectations for future policy adjustments.
Topic of the Week: Fear Not, the Consumer IS Downshifting
- Retail sales data released this week surprised to the upside. Coming on the heels of last week’s news that revolving consumer credit shot up in the latest monthly data, one might reasonably wonder if the consumer is showing fresh resilience. We provide some context to demonstrate that is not, in fact, the case.
