Succinct Summation of the Week's Events

Succinct Summation of the Week's Events:

Positives,

1)Initial jobless claims totaled 227k, 8k less than expected and the 2nd week of a below expectations print. That compares with 234k last week (revised up by 1k). This brings the 4 week average to 237k vs 241k last week as a print of 245k drops out. Continuing claims fell a touch to 1.864mm from 1.871mm, so just off the highest level since November 2021. 

2)Core retail sales in July, taking out autos, building materials and gasoline, saw a gain of .3% m/o/m, 2 tenths above expectations and follows a .9% increase in June.

3)Headline and core CPI in July each rose by .2% m/o/m as expected. The y/o/y gains were 2.9% and 3.2% respectively vs 3% and 3.3% in the month before. Energy prices were flat m/o/m after 2% declines in the two prior months and up by 1.1% y/o/y. Food prices grew by .2% m/o/m and 2.2% y/o/y. Differentiating between eating at home vs eating out, the former saw prices up .1% m/o/m and 1.1% y/o/y while the latter saw prices up .2% m/o/m and 4.1% y/o/y and why restaurant traffic is slipping. On the service side ex energy, prices rose .3% m/o/m and 4.9% and single handedly still holding up overall inflation. Core goods prices fell .3% m/o/m and are down 1.9% y/o/y. 

4)July PPI rose one tenth headline and was flat ex food and energy. The headline was one tenth under the estimate while the core rate was two tenths below. If we also take out the trade stats, the rate was up .3% m/o/m, one tenth more than expected so we can isolate the miss relative to expectations to the trade side. On a y/o/y basis, headline PPI was up 2.2% vs 2.7% in June. The core rate is higher by 2.4% vs 3% and the core ex trade was up by 3.3% y/o/y vs 3.2% in the month before.

5)NY Fed's Consumer Expectations survey for July saw one year inflation expectations stay unchanged at 3%. The 5 yr guess was unchanged too at 2.8% but for some reason the middle 3 yr guess fell .6 percentage points to 2.3% which was the lowest since they have data back to 2013. With that 3 yr, the NY Fed said "This decline was most pronounced for respondents with a high school education or less and those with annual household income under $50,000."

6)Container rates continued to moderate after the May/June spike. The Shangahi to Rotterdam price for a 40 ft container fell by $173 to $7,756 after peaking at $8,267 on July 18th and compares with about $1,700 at the beginning of the year. The Shanghai to LA trip fell $198 to $6,303 after topping out this year at $7,512 on July 11th. It was $2,100 to start the year.