As the unofficial end of summer approaches with the Labor Day weekend (August 31-September 2), markets may not be particularly attentive to the economic data calendar. There is nothing on it likely to change the outlook for a 25-basis point cut in the fed funds target rate (currently 5.25-5.50 percent) at the September 17-18 meeting, especially after Chair Jerome Powell’s Jackson Hole remarks.
The indicators on the calendar won’t contribute to expectations for the second estimate of second quarter GDP at 8:30 ET on Thursday. There isn’t likely to be much of a revision from the advance estimate of up 2.8 percent. At the moment, the GDP Nowcasts for the third quarter look for growth below that at around perhaps just under 2 percent.
Data related to the housing market in June and July will feel out of date. Mortgage rates started to decline substantially in early August and are anticipated to contribute to greater activity in the coming months. The weekly Freddie Mac 30-year mortgage fixed rate is at 6.46 percent as of August 22, the lowest since 6.39 percent in the May 18, 2023 week. Along with increased housing stock and moderation in prices, homebuyers could re-enter the market. There is also the prospect of another miniwave of refinancing. It now makes sense to refinance newer and/or adjustable-rate mortgages to a lower fixed rate. However, some potential homebuyers who can afford to wait may hold out a bit to see if rates go even lower.
What may get more attention is the Fed distract bank surveys for manufacturing and services in August. Three of the five surveys are now available from New York, Philadelphia, and Kansas City. The Dallas Fed manufacturing survey will be released at 10:30 ET on Monday and service sector survey at 10:30 ET on Tuesday. The Richmond Fed’s surveys of manufacturing and services will be reported at 10:00 ET on Tuesday. On balance, the surveys so far seem to indicate some improvement in conditions in August. However, the picture is incomplete.
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