Daily update
Daily update
- The US has more people employed, working longer hours, for more pay. Last Friday’s employment report essentially summarized a soft economic landing. There was evidence of slower hiring (without firing) in the employment details, also consistent with a soft landing. While the Federal Reserve is late in cutting rates, the delay has not yet done much economic damage.
- Former US President Trump proposed another tax increase on US consumers, with a 100% tariff for countries that “do not use the dollar” in international transactions. There have been several aggressive tax increase proposals, and markets are inclined to regard them as rhetoric. This is a somewhat peculiar suggestion—economically, what matters is the currency in which reserves are held, not the currency in which transactions are invoiced.
- China’s consumer August consumer price inflation rose, but less than expected. Producer price deflation was more severe than expected. The direct international implication of this is effectively nil. Indirectly, this signals weak demand and may prompt more policy support, which may matter.
- US inventory and consumer credit data are due. Middle-income consumers have had rising real incomes for some time (especially when the fictional owners’ equivalent rent price is ignored), suggesting their consumption is less dependent on credit.
