● Confidence among US home builders has marginally increased in August, nearing a 10-year high
● The New York Fed’s manufacturing index plummets this August, marking the lowest level since 2009
● According to Moody’s, global growth is predicted to be muted over the next two years
● UK inflation shows improvement, moving up from zero
● Asian stocks and China’s currency decline on Tuesday
This morning’s monthly report on manufacturing activity in the New York Fed region offers an early glimpse into August’s macroeconomic trends. Unfortunately, the preliminary results are quite concerning. Is this a potential red flag for the US business cycle? It may be, but it’s still too early to draw definitive conclusions. That won’t stop commentators from jumping to assertive interpretations. In light of a recovery that’s been underway for six years, one must ask: could the long-incorrect macro pessimists finally be onto something this time?
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According to The Capital Spectator’s average forecast from multiple econometric models, housing starts for July are anticipated to reach 1.166 million units (seasonally adjusted annual rate). This forecast indicates a slight decrease in residential construction compared to the previous month.
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While US interest rates may rise in the upcoming Federal Reserve policy meeting next month, the potential for tighter monetary policy isn’t currently impacting real estate investment trusts (REITs). REITs, often sought after for their attractive yields, are considered more sensitive to interest rate changes compared to stocks, though perhaps less vulnerable than bonds. Nonetheless, this theory is looking shaky given the recent modest rally in real estate securities.
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● US industrial output experienced a strong rebound in July, as reported here
● Consumer sentiment in the US dipped in August for the second consecutive month
● Wholesale price inflation in the US slowed down in July
● Is there still a rationale for a Federal Reserve rate increase?
● Japan’s economy contracted in Q2
● Capitalism: Money, Morals and Markets
By John Plender
Review via The Economist
Concerns regarding the consequences of economic inequality on social cohesion highlight the pressing moral dilemmas of markets. John Plender’s new book, “Capitalism,” reexamines these long-standing grievances, tracing back to antiquity. The pursuit of profit has often been criticized since Socrates noted, “The more [men] think of making a fortune, the less they think of virtue.” Anti-business sentiments have persisted, evolving from Petronius’s portrayal of Trimalchio’s feast to Molière’s miserly characters, and continue through the grim depictions of capitalism made by Dickens and Zola.
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According to the latest update from the Federal Reserve, industrial activity showed significant improvement in July. Production rose by 0.6% last month, showcasing a notable uptick from the mostly sluggish figures seen earlier this year. This increase represents the largest monthly gain since last November.
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Forecasts suggest a slight increase of 0.1% in industrial production, according to today’s anticipated July report, based on The Capital Spectator’s average estimate from various econometric analyses. This prediction indicates a minor deceleration from the previous month’s 0.2% rise.
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● US retail sales saw a solid increase of 0.6% in July
● Jobless claims in the US showed a slight rise, yet the 4-week average remains at a 15-year low
● Bloomberg’s US Consumer Comfort Index continues to hover around a two-month low
● US import prices decreased in July by the most in six months
● Eurozone GDP grew by 0.3% in Q2, which is slightly less than anticipated
In July, retail sales in the US surged by 0.6%, representing a noteworthy recovery from the previous month’s stagnant performance. While this increase could be merely a blip, the year-over-year trend shows signs of stabilization in consumer spending, albeit at a slower growth pace than recent highs.
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In recent economic updates, several key indicators reveal important trends for the US market. From fluctuations in home builder confidence to significant changes in manufacturing activity, each report highlights the ongoing complexities faced by the economy. This summary will delve into various economic data releases and their implications.
As we analyze these economic reports, it’s evident that while some sectors show promise, others signal caution. Keeping an eye on emerging trends will be crucial for understanding future developments in the market.
