The Week Ahead for the US Economy (30 July 2018)
July 30, 2018
1 Min read
Here’s our view on this week’s data releases relating to the U.S. economy.The most important economic data releases for the week commencing 30 July 2018:
- PCE (consensus exp. 2.2%)
- Markit Manufacturing PMI (consensus exp. 55.6)
- ISM Manufacturing PMI (consensus exp. 59.8)
- Fed Interest Rate Decision (consensus exp. 2%)
- Factory Order (consensus exp. 1%)
- NFP (consensus exp. 195k)
- Markit PMI (consensus exp. 55.9)
This week’s most important releases will be the Federal Reserve interest rate decision and Non-Farm Payroll data.
U.S economic growth accelerated 4.1% in the second quarter, the highest increase since 2014. The Increase was fuelled by consumer spending, business investment and government spending along with an increase in imports.
The Federal Reserve are unlikely to raise rates again this month, but the strength of economic growth in Q2 is almost certainly going to contribute to the expected rate hike in September, which they may hint towards.
However, the high rate of growth is unlikely to be sustainable as the tax cuts begin to wear off and a trade war starts to cause a drag on growth.
Employment has remained strong, as indicated by the Markit flash PMI. Tight labour markets and lack of skilled workers continue to plague businesses as they struggle to fulfil their hiring plans.
Last month the unemployment rate ticked up by 0.2% however during July new jobless claims remained extremely low. Businesses also remain optimistic for the year ahead despite concerns over inflation and the tariff situation.
This may suggest we can expect a good NFP reading for July.