Macro Conditions at a Glance

Signs of labor market weakness are evident in both payroll data and PMI employment numbers;
Progress on inflation has stalled;
Continued jobless claims are beginning to pick up.

The broader macro picture looks otherwise okay;
Markets are now pricing in three rate cuts for 2025.

Chart of the Month
The labor market started to show signs of weakness

Not only did July's payroll number come in lower than expected, but the previous two months were also revised down to show effectively no job growth.

Lagging Indicators

The Unemployment Rate rose slightly to 4.2%.

The number of job openings has come down from the high in 2021.

Real GDP growth saw some tariff disruptions in H1.

Q1: -0.5%
Q2: 3.0%

Q3: 2.5% (est.)

Core PCE has gone sideways and is still meaningfully above the Fed's 2% target.

Service Inflation now declines faster than the growth in wage.

Corporate earnings and profit are on trend.

Leading Indicators

3m-10y Term Spread is still in the slightly negative territory.

Initial Claims slightly declined. Continued Claims were flat.

Housing starts have resumed their decline.

Average Weekly Hours stayed low.

Retail Sales indicates that consumers are still-resilient even though sentiment is dimmed.

University of Michigan Consumer Sentiment dipped.

Manufacturing PMI or the Services PMI came in weak.
They also show a decline in employment in both sectors.




Volatility dipped as stocks making new highs.

Investor Sentiment rebounded.

Fed Rate Path