Economic Reports – Live Laugh Love Do

Inflation is the week's watchword

admin — Mon, 08 Sep 2025 02:09:57 +0000

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Normally, in the week after the monthly jobs report is released, the business and the economy chug along with the economic reports grabbing modest headlines.

Inflation, however, has been a big concern since the end of the Covid-19 pandemic, and two really important inflation reports land on Wednesday and Thursday as well as the weekly report on jobless claims hitting as well.

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Only, this will be a loud week in Washington mostly because there will be noisy debates over bigger, very political issues.

Futures trading indicates things will chug along with a decent open on Monday. So, not to worry: Nvidia NVDA, Tesla TSLA and, maybe, McDonald’s MCD will attract a lot of chatter.

A bit of good news came late last week because of the weak jobs report. Bond yields fell, and mortgage rates fell below 6.5%, the lowest level since the fall of 2024 that could give housing a boost.

Homebuilding stocks jumped in response.

First up: The Fed interviews

Treasury Secretary Scott Bessent was to have started interviews Friday with candidates to replace Federal Reserve Chairman Jerome Powell whose term expires next May.

One must be living under a rock to know how much Donald Trump dislikes Powell. Trump wants interest rates cut several months ago. Until August, Powell and the Fed were far more interested in inflation control.

There are 11 candidates for the jobs, with that three confirmed candidates for the job — by Trump on Friday.

Christopher Waller, a Fed governor who wants rates cut.
Kevin Hassett, director of the President’s National Economic Council.
Kevin Warsh, a former Fed governor who was deeply involved in the Fed’s efforts to shore up the economy in the 2008-2009 financial crisis.

Another name talked about is Michelle Bowman, the Fed vice chair in charge of bank supervision. She is a member of a family that’s owned a small Kansas bank since its founding in 1882.

She and the others are advocates of lighter bank regulation.

All of the candidates, in theory, would regard no bank as too big to fail.

Bessent himself doesn’t want the Fed job; he has emerged as the dominant player on economics in the Trump Administration. And, as has become clear, the Administration is injecting itself more directly into the economy workings.

The Treasury Secretary also wants major changes in how the Fed operates, mostly to bring the Fed closer to heel with the Administration’s thinking.

More Economic Analysis:

New homes under construction in Vacaville, Calif.

Bloomberg/Getty Images

Next up: the two inflation reports

The Producer Price Index. It comes out Wednesday. It measures prices received by businesses. It should show a 3.3% year-over-year increase. Core PPI is expected at 2.8% year over year. It strips out food and energy costs.

The Consumer Price Index. This is he headline grabber. This is a measure of what consumers are paying for a set list of goods and services. The consensus estimate is that the index will be up 2.9% year over year and 3.1% year over year when food and energy taken out.

In the the late 1970s and early 1980s, it reached as high as 13.5%. It hit 9%-plus during the post-Pandemic recovery and forced the Fed to raise rates to curb it.

Here we stop to note that the year-over-year increases of both indexes would be higher than the Fed’s target of 2% annual inflation. The target itself is not exactly etched in stone, and many believe it is simply too rigid.

Moreover, many conservative economists believe the inflation bouts in the 1970s and 1980s, in the aftermath of the 2008-09 crisis and after the Pandemic were due to Fed moves to flood the economy with too much cash.

There is dispute on whether the Fed was responsible. In 2008-2009 crisis, its goal was to stave off economic collapse, and it mostly worked.

In the Pandemic case, but prices shot up because there was so much global demand for goods and services when the crisis subsided.

Three more reports to watch

National Association of Indetrupendent Business Confidence Index for August. This measures how small businesses view the economy. The July report cited problems getting labor. It may come up in August. Also, consumer spending has been showing signs of contraction.

Initial Jobless Claims, from the Bureau of Labor Statistics. This is has been rising in recent months, and is a decent economic indicator.

Michigan Consumer Sentiment Index, from the University of Michigan. This looks at how Americans view the economy. It slumped in April after financial market slumped. It recovered quickly in the stock-market boom, but has slumped again.

A last note: Housing

Everyone who has looked at buying a house — a key American dream — knows prices are sky-high in many markets, locking many would be buyers out of the market.

Bessent has made noises the Trump Administration would declare a housing emergency, maybe in the fall. It’s not clear what that specific ideas would be included. But look for it.

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Trade, inflation fears will grab limelight

admin — Mon, 09 Jun 2025 04:03:10 +0000

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There are several economic reports worth looking at this week, but pay closer attention to two economic events.

One will come from London. The other comes Friday from Michigan.

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Both events can cause investors to buy or sell stocks, bonds or even houses. Futures trading Sunday evening suggests stocks will open modestly lower on Monday.

In between are two inflation reports probably that will probably paint a benign inflation picture — for now.

Tariff talks resume

The London event is the meeting between U.S. and Chinese trade officials trying to hammer out a workable tariff deal. It’s not clear if anything major will come from the meeting, but one can hope.

The last time there were talks, the two sides agreed on May 21 to come to an agreement on the issues in 90 days. That would mean by Aug. 11. But little has happened since, and the Trump Administration is getting impatient.

The U.S, team will include Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer. China’s team will be led by Vice Premier He Lifeng.

At the time of their first meeting in Switzerland in May, the Chinese were charging 125% tariffs on U.S. goods. The U.S. had imposed 145% in tariffs on Chinese goods.

After the May meeting, the tariffs on Chinese goods were dropped to an average 51%. The Chinese tariffs on U.S. goods were dropped to an average 32.6%. (Sounds reasonable, but they could wipe out a retailer’s annual profit.)

Complicating matters is China produces 90 % of rare earth metals, important materials for use in electric vehicles and other products work. And the country is now holding back on export licenses so non-Chinese companies can buy the materials. Without the rare earths, assembly lines could shut down.

It sounds dull but isn’t. China is a major source of everything from semiconductors and auto parts to Apple (AAPL) iPhones. Oh, and let’s not forget: Most toys made for the holiday season are produced in China.

If the London meeting goes badly, financial markets could swoon again.

After President Trump announced the U.S. tariff proposals on April 3, the Standard & Poor’s 500 Index fell 10.5% in two days.

Stocks soared on the decision to negotiate. On April 8, the S&P 500 was down as much as 15.3% for 2025. It’s now up 2% on the year.

Gauging how consumers see the economy

Friday’s event is the first cut of the University of Michigan’s Consumer Sentiment Survey for June. (The second comes out at month’s end.)

The Michigan survey has been avidly followed this year because it suggests extreme worries about the economy, inflation and tariffs.

And its findings, optimistic or rotten, have moved markets.

The criticism of the survey is that it generates soft data — basically irrational one-off reactions compared with data based on statistics that have shelf life. Fair enough. But the survey and the Conference Board’s Confidence Index grab attention.

A customer shops at a Walmart store in San Leandro, Calif., in April.

Justin Sullivan/Getty Images

Small business gets a chance to weigh in

The National Federation of Business will release its own confidence index on Tuesday.

Its members have complained for most of the year that the Trump Tariff proposals are making business planning impossible.

So, while many businesses are holding on to workers, they’re being very cautious on spending for, say, new plant and equipment.

A hint on the jobs picture

Thursday’s Initial Jobless Claims report may be concerning. It’s been rising in the last few weeks. This past week, the claims estimate climbed to 247,000, up from 239,000 the week before.

No one wants to see jobless rates climb, least of all the Trump Administration.

In truth, the gains over the last year have been on a slow drift higher. Nothing, in fact, like the first week of April 2020, during the Covid-19 pandemic, when 6.1 million people were laid off in a week.

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Is inflation bad or not? It depends

The two inflation reports are widely watched and discussed and will be again this week. The odds the reports won’t change the inflation picture the inflation changing much.

The Consumer Price Index comes out at 8:30 on Wednesday. The report from the Labor Department is likely to show a 0.2% change in prices from April to May and a 2.3% change year over year. That’s unchanged from April.

Stripping out energy and food prices, the one-month change is likely to be 0.2% and the year-over-year change holding steady at 2.8%, the same as in April.

The index is built to estimate what’s happening to prices for stuff and services consumers buy.

During the winter, it showed that egg prices rose during the winter as bird flu invaded many poultry farms. But in April, egg prices fell.

Look for indications tariffs are affecting consumer prices. You may see signs in costs for apparel, new and used cars, and meat.

At 8:30 a.m. on Thursday, the BLS’s Producer Price Index comes out. This measures the selling prices producers get for goods and services.

It may show a 0.5% decline month to month but a 2.4% increase year over year. The core estimates are down 0.1% month-to-month and 2.9% year-over-year.

Are these bad numbers? The Federal Reserve thinks so because the central bank wants U.S. inflation at no more than 2%. President Trump thinks the numbers are fine because he wants the Fed to cut interest rates.

He has sort of a point: It would take prices rising at 2.9% a year about 24 years to double.

Remember when the CPI year-over-year change briefly hit 9% in the summer of 2022? Sustained Inflation that high a rate would double prices in 7.5 years.

But that would create its own problems, wouldn’t it?

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