The dearth of economic data in the August 5 week gives way to a more compelling roster of economic data in the August 12 week. Concerns that the US economy is growing more slowly than previously thought could be confirmed or debunked. In any case, the data should reinforce expectations for the FOMC to cut rates at the September 17-18 meeting.
Recent softening in housing market conditions may start to see some turnaround. Mortgage interest rates are on the decline and could coax some buyers back into the market. Easing in upward price pressures will also help along with increased supply. The NAHB/Wells Fargo housing market index for August at 10:00 ET on Thursday should show a halt to the declines of the past three months. Although present sales probably haven’t picked up, expected sales and buyer traffic should make the outlook a little more optimistic for homebuilders.
The July report on retail sales at 8:30 ET on Thursday could show that the July 4 weekend was one in which consumers spent on travel and at brick-and-mortar outlets to take advantage of summer sales, especially during a period of very hot weather in much of the US. Also, a likely boost to sales will come from the presence of Amazon’s Prime Day sales event (July 16-17) which was a record-breaker for the e-tailer. Other online shopping outlets offered deals around the same time. Motor vehicle sales were a bit higher in July, but probably will offer only a small positive for the total. Gasoline service station sales could see gains related to both volume and slightly higher prices. These numbers could start the third quarter off with a decent amount of momentum that sales tax holidays in August could keep going.
The CPI numbers for July at 8:30 ET on Wednesday are expected to reflect ongoing moderation in consumer price inflation in line with FOMC forecasts. This should be another piece of the totality of data that will determine whether Fed policymakers will lower the fed funds target rate range from 5.25-5.50 percent where it has been since July 2023.
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