- Much better inflation numbers helped Treasuries to rally, and longer-end has held on to most of these gains. Shorter-end has retraced somewhat. But real yields have fallen across the curve (pages 3 – 5)
- Very subdued reading for core inflation in June, helped by falling durables prices. Crucially, services inflation has eased much more than expected (pages 6 – 12)
- Drop in inflation expectations has lifted consumer confidence (page 13)
- Consumption growth slowed heading into Q2, but income growth in $ terms holding up well. In real terms, incomes will be getting a big boost (pages 14 – 17)
- Any dip in consumption growth for Q2 needs to be seen in context: Q1 was very strong. GDP growth likely to rebound swiftly in Q3. Investment in IPP slowed in Q1, but still at a record as share of GDP, and will turn up sharply again (pages 18 – 21)
- Strong durable goods orders in May point to upturn in non-residential investment excluding IPP too. Rising backlog of orders notable (pages 22)
- Philly Fed manufacturing survey more optimistic. NFIB price plans turn up (pages 23 – 27)
- Existing home sales weak, but some improvement in median prices (page 28)
- NAHB survey rises for a seventh straight month. New home sales bounce. Timely house price indicators have turned up, notably Freddie Mac (pages 29 – 32)
- Decline in residential housing moderates (page 33)
- Non-residential construction spending strong: manufacturing buoyant (page 34)
- Private sector services job creation has cooled. Offset by strong government payrolls, and construction (page 35)
- Falling initial jobless claims point to new lows for unemployment rate (pages 36 – 37)
- That said, prime-aged labour market participation rate hits new highs (page 38)
- Job openings for government remain elevated (pages 39 – 41)
- But median wage growth is cooling (pages 42 – 44)
- Profit margins fell in Q1, squeezed by rising costs and slower price increases (page 45 – 46)
- Profits remain strong for tech (information) and retailers (pages 47 – 48)
- Corporate debt falls again as a share of GDP (page 49)
- Loan demand weak (pages 50 – 51)
- Mortgage arrears remain very low: household debt falls again. Rise in consumer credit arrears (pages 52 – 57)
- Rising Federal government budget deficit a big concern for Treasuries (pages 58 – 59)
- Trade deficit ‘stable’: slower exports (goods) but services impressive (pages 60 – 68)
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