Capsule Economic Indicator Summaries for the Week of July 6
This week’s statistical calendar is very light. The only major monthly reports on the schedule are the ISM non-manufacturing index today, and international trade and the JOLTS report tomorrow. The data flow will pick up next week with retail sales, industrial production, the CPI and housing starts all packed in around Chair Yellen’s Humphrey-Hawkins appearances on July 15 and 16.
Despite the Fed’s repeated assertions that rate hikes are potentially on the table at every FOMC meeting, readers continue to ask us whether we think the Fed would really launch a tightening cycle at a non-press-conference meeting, or if the Fed would be willing to raise rates for the first time in a thin year-end market. We think answer to both questions is yes. In a data-dependent world, every FOMC meeting necessarily is “live” because every employment and inflation report is “live”. In addition, this week’s newsletter takes a quick look at two of the statistical biases in this Thursday’s employment report. The initial estimate of June payrolls is likely to be overstated to some extent, while average hourly earnings are likely to be understated.