Powell Speech in 15 Minutes on a Data-Heavy Day
August 27, 2021
Fed Chairman Powell addresses the Jackson Hole Central Bank Symposium at 10 EDT. Markets have been comparatively flat, awaiting what Powell has to say regarding the tapering of Fed bond purchases and what officials anticipate for U.S. growth and inflation. The trade-weighted dollar has edged 0.1% higher.
U.S. personal income in July, which had been expected to rise just 0.1-0.2%, instead jumped 1.1%. Personal spending continued to grow, climbing 0.3% on month which was as expected. The core PCE price deflator lost some momentum with a 0.3% uptick after averaging 0.6% per month in the prior three months, and its 12-month rate of increase stagnated at 3.6%. Meantime, the advance estimate of the U.S. trade deficit, $86.6 billion, dropped to a 3-month low.
Several countries reported measures of consumer and/or business confidence today:
- Swedish consumer sentiment rose to a 2-month high, while business confidence there slipped to a 2-month low in August.
- Italian consumer and business confidence each printed at 2-month lows. Within the business measure, confidence in manufacturing weakened to a 2-month low in August.
- French consumer confidence fell to a 3-month low of 99 this month from 100 in July and a 15-month high of 102 in June.
- Turkish economic sentiment climbed 0.7 index points to 100.8, best since April 2018.
- Finnish consumer confidence fell to a 3-month low in August of 4.0 from readings of 4.4 in July and a 40-month high of 4.6 in June.
- The U. Michigan/Reuters revised estimate of U.S. consumer sentiment in August (70.3) was 0.1 points above the preliminary calculation announced two weeks ago but still well below July’s 81.2 result.
Among reported price statistics today in addition to the aforementioned U.S. personal expenditures price deflator, German import prices shot up 2.2% on month and 15.0% on year. The 12-month rate of inflation was the most since September 1981 and included an 89.6% advance in imported energy costs.
Producer price inflation in Singapore accelerated 0.2 percentage points to a 2-month high of 17.0% in July.
Consumer prices in Tokyo fell 0.3% seasonally adjusted in August. It was the first drop such monthly decline since April and resulted in an unchanged 12-month 0.4% rate of drop. Core CPI, which includes energy, was unchanged from the August 2020 level, and energy prices were 0.9% higher than a year earlier.
A 0.8% monthly rise in Greek producer prices raised the year-on-year increase by 0.4 percentage points to 13.0% in July, not far from April’s 14.6%, which had been the highest pace since July 2008.
Canadian producer prices fell 0.4% in July, the first monthly dip since December. On-year PPI inflation fell from 17.2% in June to 15.4% as a result.
Austria’s manufacturing purchasing managers index printed 2.1 index points lower in August at a 3-month low, but the 61.8 level still implied a robust sector.
A 2.7% monthly slump in Australian retail sales in July followed a drop of 1.8% in June and was the biggest slide so far this year. Australia has had to reimpose restrictions on social activity to combat the highly contagious Delta Variant of Covid-19.
The United States yesterday experienced over 156k identified new cases of the disease and reported more than 1200 deaths from it.
Irish retail sales fell 1.7% in July, their first decrease since January, and the on-year increase slowed to a 5-month low of 5.2%.
Retail sales in Norway contracted 3.1% on month and 4.1% on year in July. The drop from July 2020 was the largest 12-month rate of decrease since April 2016.
A 0.9% quarterly rise in Swedish GDP last quarter confirmed an earlier estimate, but on-year growth was revised somewhat downward to 9.7% against a weak 2Q 2020 level that had been 8.1% below its year-earlier level.
Mexico recorded the largest monthly trade deficit ($4.06 billion in July) since January 2019.
Corporate profits in China continued to exhibit high but decelerating year-on-year growth of 16.4% in July after 20% in June. In the first half of 2021, there had been an average jump of 66.9%.
Almost an hour into U.S. trading, the DOW, S&P 500, and Nasdaq showed advances ranging form 0.6% to 1.0%. Japan’s Nikkei-225 closed somewhat lower, and equities in Europe are a little higher.
During Powell’s speech at Jackson Hole, the weighted DXY index has fallen around 0.5%. The price of oil has slipped as well, but gold has moved back above $1,800 per ounce.
Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: German import prices, Jay Powell, U.S. personal income and spending
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