Big downward revision in jobs locks in September interest rate cut by the Fed, puts November cut in play
Monthly employment reports overstated the number of job created by the U.S. economy by 818,000 in the 12 months that ended in March 2024, the Labor Department reported on Wednesday, August 21. That revision, part of the annual process that reconciles job reports...
CPI inflation report this week is one last barrier to September interest rate cut
Expect a final inflation test this week before the Federal Reserve meets on September 18. Unless there’s a huge surprise in the Wednesday, August 14, CPI report, the Fed will cut interest rates for the first time at that meeting. The Federal Reserve Bank of...
Japan taketh away and Japan giveth–today’s rally in Tokyo wipes out most of yesterday’s loss
oday, Tuesday August 6, the Nikkei 225 index closed up 10.23% in Tokyo. That erased most of Monday’s 12% loss. And it led to the U.S. futures market opening higher and U.S. stock indexes moving up today. At the close in New York, the Standard & Poor’s 500 was...
Could the stock correction be all about Japan? And close to an end?
Okay, the correction in the NASDAQ and the near correction in the Standard & Poor’s 500 isn’t all about Japan. U.S. stock valuations are stretched. Air is coming out of the AI bubble. The U.S. economy is slowing But to me those factors don’t explain the stunning...
August is making the stock correction scarier: Is the cure September?
August. Yeah, I know you can read a calendar, but take a moment to think about how the extraordinary August economic news vacuum feeds into the current market plunge. It’s a good environment for downside volatility. No Federal Reserve meeting in August so no interest...
September it is: Fed signals September interest rate cut
At Wednesday’s meeting the Federal Reserve left its benchmark interest rate unchanged at 5.25% to 5.50%. Fed Chair Jerome Powell said an interest-rate cut could come as soon as September. “The question will be whether the totality of the data, the evolving outlook,...
It’s getting to look a lot like September–for the Fed’s first interest rate cut
The U.S. economy added 206,000 jobs in June, the Bureau of Labor Statistics reported today, July 5. That was above the median forecast of 190,000 new jobs in a Bloomberg survey of economists. But even though the June number came in above expectations, the overall...
So much for that job market slowdown in May
Employers added 272,000 jobs in May, the Bureau of Labor Statistics reported this morning. That number was well above the 185,000n projected by economists and even higher above the 175,000 in the April report. The financial markets were disappointed with the news...
And now they tell us: A day before the jobs report the BLS tells us that the employment numbers have been wrong
The Federal Reserve has been telling us over and over again that its decision on cutting interest rates depends on the data. Among other things, the Fed wants to see a steady slowdown in the employment market reflected in the data before it cuts interest rates. But...
Powell says Slow–as market waits for Wednesday CPI inflation report
Granted that the remarks weren’t delivered at the most high profile venue–a panel discussion at the Foreign Bankers Association meeting in Amsterdam–but I read Federal Reserve chairmen Jerome Powell as saying that the U.S.central bank might hold interest...
This coming week the action in the markets is beneath the surface
This week I expect surface quiet but important movement in the lower depths of the financial markets. The week ahead lacks in obvious market-moving events and reports. There’s a smattering of earnings with Disney (DIS) on May 7 and Toyota Motor (TM) on May 8. But...
The jobs data doesn’t tell us what the Fed is thinking about rates and inflation–so the market guesses
The U.S. economy added 175,000 jobs in April, the Bureau of Labor Statistics announced on Friday. That was the smallest number monthly new jobs in six months. The unemployment rate ticked up to 3.9%. And traders tried once again, to get ahead of the data. Concluding...
The Fed walks a very, very fine line on inflation and interest rate cuts
On Wednesday, May 1, the Federal Reserve decided NOT to cut interest rates at its May 1 meeting. That was the decision expected by the financial markets. And Federal Reserve chair Jerome Powell tried his best to keep traders from speculating that the Fed would...
Now it’s one interest rate cut and not until December
How views on interest rates have changed since the start of 2024. Then, in January, the consensus view called for as many as six interest rate cuts from the Federal Reserve in 2024 for a total of 150 basis points in cuts to the Fed’s benchmark interest rate. Today,...Producer price index continues bond market freak out
So why was this so important today? So important that the yield on the 10-year Treasury rose another 3 basis points to 4.58%. The Producer Price Index for final demand rose 0.2% in March, seasonally adjusted, the Bureau of Labor Statistics reported today. Final demand...
Hot CPI inflation number takes June interest rate cut off the table
In March the Consumer Price Index inflation rate rose more than expected by economists for a third straight month, the Bureau of Labor Statistics reported this morning. That looks to the market today, and to me, like it takes an initial interest rate cut off the table...Stronger than expected March jobs report nudges odds against June rate cut slightly
The U.S. economy added 303,000 jobs last month. That was far more than than the 192,000 expected by economists.The unemployment rate dipped to 3.8%. For today at least the stock market sees the report as “The glass is half full.” Yes, a stronger than expected labor...
About those inflation worries yesterday? Today’s ISM services report says “Never mind.”
The Institute for Supply Management’s composite index of services fell 1.2 points to 51.4 a four-year low. The drop in the report released today, April 3, was the second month in a row. The services report came a day after the manufacturing sector report showed costs...
No surprise! on interest rates from the Federal Reserve today
The Federal Reserve unanimously voted to leave the benchmark Fed Funds rate in a range of 5.25% to 5.5%, the highest since 2001, for a fifth straight meeting. They left their projections in the quarterly Dot Plot for the Fed Funds rate by the end of 2024 at 4.6%. That...
No Fed drama on Wednesday but still the chance for a market-moving disappointment
There’s plenty of room for disappointment in Wednesday’s Dot Plot projections from the Federal Reserve. Economists surveyed by Bloomberg were still expecting the Federal Reserve to cut interest rates three or more times in 2024 with the first cut coming in June. (To...
Hotter than expected Wholesale Price Inflation adds to inflation/interest rate fears
It’s becoming a refrain. Today another inflation measure came in hotter than expected. Which is the problem. It’s har to ignore the possibility that inflation has stopped its steady decline and its recent months has started to move up again. Is there a problem here...
Why next week’s Dot Plot from the Fed is more important than ever after a hot inflation report
There’s not much question of what the Federal Reserve will do at its March 20 meeting. The odds–99% on the CME Fed Watch Tool–are that the Fed will do nothing and leave interest rates at the current 5.25%-5.50% benchmark. But that day the Fed will also...
Core CPI inflation disappoints again for February
Core CPI inflation came in hotter than expected in February for a second straight month. The core Consumer Price Index, which excludes food and energy prices, increased 0.4% from January, the Bureau of Labor Statistics reported today. The year over year inflation rate...This week it’s a battle between AI and inflation
This week I expect a battle for the market’s attention between the continued AI monster momentum story and the macro story on inflation and interest rates. Will the extreme AI momentum that ended the week–with Nvidia (NVDA) up 4.0%, and Advanced Micro Devices...
Inflation, especially services inflation, looks sticky: PCE inflation up a fast 0.4% month to month in January
The headline, all-items Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation measure, climbed at a 2.4% year over year rate in January. That was in line with what economists had forecast and down from the 2.6% annual rate in...
Big deal inflation report on Thursday could be bad news for stocks
On Thursday the financial markets get a new monthly PCE inflation report. The PCE, Personal Consumption Expenditures index, is the Federal Reserve’s favorite inflation measure. And Thursday’s report on January inflation could be bad news for the financial markets, ...
Good but disappointing news on CPI inflation for January
Headline, all-items Consumer Price Index (CPI) inflation fell again in January, but not by as much as economists had projected before this morning’s report from the Bureau of Labor Statistics. In January prices rose at 3.1% year-over-year. That’s a slower increase...
Federal Reserve disappoints, comes close to taking a March cut in interest rates off the table
The Federal Reserve maintained its benchmark interest rate on Wednesday in a range of 5.25%-5.50%–as the financial markets expected. But the central bank pushed back more strongly on than financial marks hoped on a March 20 schedule for the first cut in rates....
Big news for the week ahead isn’t the Fed meeting but Apple earnings report
Yes, it’s a Federal Reserve meeting week, but I expect Apple’s (AAPL) earnings report for its December quarter to be the big event of the week. With the potential to move the tech sector and the market. Fed first. The Fed’s interest rate setting body, the Open Market...Jim’s Daily Email Alerts:
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