July Personal Income and Spending Personal income +0.4% MoM vs +0.4% exp/+0.3% prev Real personal spending +0.5% MoM vs +0.5% exp/+0.3% prev. Core PCE price index +0.3% MoM vs +0.3% exp/prev Core PCE price index +2.9% YoY vs +2.9% exp/+2.8% prev Charts to follow
Just amazing that economists who miss on just about every non-government data point were able to hit every single data drop spot on this morning. Or was it the other way around?
Dang, expecters looking good right now
Advance goods trade deficit $103.6bn in July vs $90.2bn expected and $84.9bn previous. Imports up 7.1% MoM. Will dig into details here later as well.
In Canada Q2 GDP down 1.6% annualized in Q2, Q1 revised down from +2.2% to +2.0%. Estimate for Q2 was -0.7%.
Generally this was a good report for the doves, with durable goods prices falling in a surprise swing and continued rent disinflation. That said! Services PCE ex Energy/Housing (proxy for trend inflation ex tariffs) is firming. Stripping out imputed categories, it keeps running above 2%.
On the trade data, record capital goods imports. Consumer goods imports rose sequentially but remain very weak...treat supply chain still working through inventory. Total imports may have been driven by gold (included in industrial supplies).
Real income and spending have both softened this year. Both of these metrics rose ~4% annualized MoM in July.
So inflation is cooling in some areas but not others, the trade deficit suggests strong domestic demand but that can create future inflationary pressure, and consumer spending is tepidly encouraging... Would you imagine this would code as "wait and see what happens next" to the Fed?
Pls stop asking me this bsky.app/profile/dmbm...
OK, but can I get a mulligan?
I never asked before, but considering everyone is resigning or being fired, I think it’s a fair question every month. There will be an inflection point where the numbers are off and was just wondering if we are there yet.
Pearkes has explicitly said when some event (like the firing that followed the bad jobs report) starts to erode trust in the verity of the numbers, or lays the groundwork for possible future erosion!
It's less that there's literally no chance it can happen and more that, when it does, he'll tell us without people needing to ask in his mentions, I think is the thing
I worked at a soup and salad buffet place once. People would look for spoons by the salad, at the beginning of the buffet. We had spoons by the soup, further along. There was a certain customer who would find this irritating, insisting spoons should be available sooner! 1/2
No amount of discussion or explanation mattered; we wound up putting spoons with salad to stop the annoyance. What I am saying is, you may need a disclaimer at the start of your skeets about the quality of economic numbers; get out ahead of the crowd early.
A lot of us are not fluent in this kind of stuff and as someone who teaches a lot, I genuinely think it’s bad form to bite people’s heads off for being curious. Anyways, I will shut up now as I don’t want anyone to block me as I found @peark.es posts extremely helpful in navigating this mess.
It's fine Meg
I really hope I did not come across as biting people heads off!
For those at home: watch for hysteria at BLS akin to what happened at CDC yesterday. Personally I think it’s coming, but it ain’t here yet.
THAT is what I was asking. Thank you.
Read this one in a Stephen A Smith voice.
3% is the new 2% but they won't say that of course. (and I think 2.5-3 should have been the target all along)
That'll trim GDP estimates
I guess not, which means I don't understand something.
Ineventories also picked up + PCE data offset.
I was more thinking about the effect of that trade balance. I guess the Atl Fed can adjust for the monetary gold component, so the effect went the other way.
Net exports contribution went from -.36 to +.59 even though the trade numbers seemed bad to me.
I'm going through their numbers and still don't see it. I guess we'll know more when BEA reports the trade #s next week.
3 percent the new 2 percent? I feel any cuts going to stoke an already well fed fire
Do we believe these numbers are accurate? Waiting for your cue to say these don’t seem right.
The Canadian numbers are fine.
Would you expect with margins shrinking and spending softening, there would be more or less discounts from vendors going forward?
Bad news for rate cut!