Summary
United States: Inflation’s Bumpy Descent Continues
- A slate of price data left the overall inflation picture little changed this week. Consumer prices came in a touch hotter than expected and producer prices came in a touch cooler, but on trend inflation continues to grind lower. With recent progress slower going and upside risks to inflation remaining, the latest FOMC minutes indicate further “recalibration” of the fed funds rate will proceed more gradually.
- Next week: Retail Sales (Thu.), Industrial Production (Thu.), Housing Starts (Fri.)
International: Mix of Economic Data from Advanced and Emerging Economies
- It was a moderately busy week for international economic data releases. In Japan, wage growth data were generally encouraging, and U.K. monthly GDP figures point to an economy that is continuing to recover. Elsewhere, the Reserve Bank of New Zealand’s dovish 50 bps rate cut has led us to forecast more aggressive central bank easing going forward. China’s stimulus announcements have disappointed so far, although another announcement is expected this weekend, while inflation slowed by more than expected in Mexico but picked up slightly in Brazil.
- Next week: U.K. CPI (Wed.), European Central Bank (Thu.), China GDP (Fri.)
Credit Market Insights: Consumer Credit Moderates as Interest Expenses Mount
- Consumer reliance on credit moderated in August, as demonstrated by data released this week by the Federal Reserve Board. Overall consumer credit outstanding grew $8.9 billion to a total outstanding balance of $5.1 trillion. The moderation from July’s swift pace of growth of $26.6 billion was primarily driven by a drop in revolving balances, a category largely composed of credit cards.
Topic of the Week: How Will Economic Data Reflect Hurricane Helene and Milton?
- The 2024 hurricane season has devastated many areas in the Southeastern United States. It is too early to get a precise read on the full suite of damages and loss of life caused by Helene and Milton. Yet, we know from times past that severe hurricanes can meaningfully distort economic data.
