High points for US economic data scheduled for July 29 week

Focus in the July 29 week will be narrowly fixed on two times: 14:00 ET on Wednesday when the FOMC releases its July 30-31 meeting statement and 8:30 ET on Friday when the July employment numbers are published.

Markets are anticipating that the FOMC statement will set the stage for a rate cut in the near future, presumably the September 17-18 meeting. There’s some potential that a few FOMC participants will feel no need to wait for further economic data, but probably not with enough sense of urgency to dissent in the vote. The meeting statement will acknowledge the solid GDP growth of the second quarter, that the labor market has essentially finished rebalancing to one that is still healthy, and that disinflation is moving again toward the Fed’s two percent inflation objective. Note that Chicago’s Austan Goolsbee will be voting as an alternate for Chicago in the gap between former Cleveland President Loretta Mester’s departure in early June and when Beth Hammack is scheduled to take over on August 21. Hammack will be a voter for the remainder of 2024.

Chair Jerome Powell’s press briefing at 14:30 ET on Wednesday should elaborate on the FOMC statement, but he will not do more than signal that the FOMC is reaching the “greater confidence” that has been sought in the economic data. There will be no outright promise of a rate cut in September. Rather, he will emphasize that the FOMC remains cautious, patient, and data dependent. He will resolutely avoid commenting on the change in the political situation in the current election cycle and assert that Fed policymakers do not set policy within a political framework.

The data on nonfarm payrolls and the unemployment rate in July will not be available to the FOMC for their deliberations earlier in the week. However, one last piece of the inflation puzzle will be reported on Wednesday at 8:30 ET that will inform the FOMC decision. The second quarter 2024 employment cost index will tell if upward pressure on employee compensation is easing or if it continues along the recent plateau of year-over-year gains of 4.2 percent seen in the fourth quarter 2023 and first quarter 2024.

Early forecasts suggest that change in nonfarm payrolls is expected at around 175,000 along with no change in the unemployment rate of 4.1 percent. There are no special factors of particular note for the July data. It is possible that the extreme heat that blanketed much of the US in July could have an impact. Historically, the July report often comes in below forecasters’ consensus estimates, but also that the June numbers are frequently revised higher. In any case, the July employment situation should remain one of modest-to-moderate hiring and relatively low unemployment.