Data: Census Bureau ; Chart: Neil Irwin/Axios American consumers have powered the economy forward this year. In July, they took a breather. Why it matters: While the underlying trend in consumer demand appears solid, retail sales hit an air pocket last month, suggesting a bumpier path ahead for overall growth. - Combined with a weak jobs report last week and two subdued inflation readings this week, it points to the Federal Reserve having room to be patient on potential interest rate increases this fall. Driving the news: Retail sales fell 0.6% in July, the weakest performance in more than a year and well below the 0.1% gain analysts expected. - Excluding gas stations and auto dealers, there was still a 0.3% decline in sales, meaning…
Income growth is accelerating — supporting consumer spending — while inflation is rising even beyond the energy-price shock. Why it matters: That combination, shown in new data out Thursday morning, creates a complex reality for Kevin Warsh's young Federal Reserve chairmanship . - It's good news for the economy's underlying resilience, but it raises fresh questions about whether interest rates are exerting as much downward pressure on demand as Fed officials may believe. What they're saying: "The U.S. consumer is not cracking," Olu Sonola, an economist at Fitch Ratings, wrote Thursday morning, adding that the oil price shock has not derailed consumer spending. - "Headline inflation may be nearing a peak as energy prices fall, but…
U.S. retail sales exceeded expectations in May, driven partly by higher spending at gas stations.
U.S. retail sales exceeded expectations in May, driven partly by higher spending at gas stations. PULSE POINTS WHAT HAPPENED: U.S. retail sales rose by 0.9 percent in May, reaching $763.7 billion, surpassing the 0.5 percent increase anticipated by economists. This growth was largely driven by higher spending at gas stations amid elevated energy costs. However, core retail sales, which exclude autos, gasoline, building materials, and food services, also rose 0.7 percent, suggesting solid consumer demand and supporting expectations for stronger second-quarter economic growth. DETAIL: Sales in April were revised down to a 0.4 percent gain, while year-over-year retail sales increased 6.9 percent. Higher fuel costs contributed to the…Open
Data: Bureau of Labor Statistics; Chart: Neil Irwin/Axios The U.S. labor market has found its footing: A yearlong pattern of whipsawing between job gains and losses is finally breaking, a sign that stabilization is taking hold. Why it matters: The labor market is holding up despite a wall of headwinds, including an energy shock stemming from the Iran war and the uncertainty that comes with the conflict. So far, the damage that was expected to ripple through hiring simply hasn't shown up. - But this isn't the gangbusters hiring environment of 2022. It's something steadier and possibly more fragile, with warning signs in the underlying data. - Still, the firming evident in a range of data lessens the chances for further interest rate cuts…