Two major issues dominated the news in late July: Inflation – whether it is, is not a problem or is likely to be one; and the prospect that millions of renters would be evicted from their homes as a federal moratorium barring evictions for nonpayment of rent expired.Read More
Will they, or won’t they? The ‘they’ is the Federal Reserve and the question is whether the policy-setting Federal Open Market Committee (FOMC) will lower interest rates when it meets next in late July. The committee voted 9-1 in June to leave rates unchanged, but a post-meeting statement, eliminating previous references to “patience,” signaled a willingness to consider a rate cut, though probably not before next year. The statement also downgraded the committee’s assessment of economic strength from “solid” to “moderate.”
If you’re looking for consistency, you won’t find it in recent economic reports, which seem to reflect the oft-heard complaint that economists “point in all directions.” Underscoring that point, Barron’s reported recently that the International Monetary Fund has scaled back its forecast for this year “as economic pessimism grows,” while a Housing Wire headline announced much more cheerfully that “Recession Fears Diminish as the Nation Approaches a Goldilocks Economy.”
Reflecting the impact of the simmering (trade war with China and the threat of tariffs on Mexican goods, the employment picture darkened considerably in May. Employers added only 75,000 workers to their payrolls, way below the 180,000 analysts had expected, while estimates for March and April were also scaled back.
“Everyone can relax.” That conclusion from a Wall Street Journal report, reflected the consensus exhale accompanying the March employment report. Employers added 196,000 jobs for the month, beating analysts’ expectations and pretty much erasing the fears stirred by February’s stunningly anemic 20,000 gain. That total was revised upward to 33,000, The statistical adjustments also added another 1,000 jobs to the robust January total, boosting it to 312,000.