Consumer spending and income continued to post moderate gains, according to this morning’s update for July from the US Bureau of Economic Analysis. Inflation remained tame in the report, with the personal consumption expenditures index higher by only 0.3% from a year earlier. Otherwise the numbers du jour reaffirm the view that a solid if modest US expansion was intact through last month.
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Treasury yields held on to their modest rebound this week through Thursday’s close, ahead of the Federal Reserve annual conference that begins today in Jackson Hole, Wyoming. No doubt the discussions will center on whether the central bank will begin raising interest rates at its Sept. 16-17 policy meeting. Earlier this week, New York Fed chief Bill Dudley threw cold water on the prospects for tightening next month, explaining that the case for a rate hike looked “less compelling” relative to two weeks earlier. The catalyst for his cautious view, of course, is the recent market turbulence. But in the wake of this week’s US economic reports, it’s not obvious that the macro trend is stumbling for the world’s largest economy, even if Mr. Market’s hysterics of late suggest otherwise.
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● US GDP growth revised sharply higher to 3.2% for Q2
● US jobless claims fall 6,000, close to multi-decade low
● US pending home sales edge up in July–up 7.4% from year-earlier level
● US consumer comfort index jumps to 5-week high
● Eurozone economic sentiment ticks higher in August