Friday’s data deluge in the US revealed more cracks in the MAGA economy, as consumers reined in purchases, and business investment slowed during a month defined by trade tensions, recession fears and market volatility.
Consumer spending rose just 0.1% MoM in August, the most meager gain in six months, data showed.
Income gains were decent, though, which ostensibly suggests Americans still have the capacity to spend and thereby prolong the expansion in the absence of news that dents confidence further.
Retail sales data remains robust, although this week’s IHS Markit PMIs appeared to presage an imminent deceleration in nonfarm payrolls, as employment gauges cratered.
The final read on University of Michigan sentiment is due later Friday.
Read more: The US Economy Is Good, Bad And Ugly
The Fed’s preferred inflation gauge missed estimates in August, with PCE unchanged MoM on the headline (consensus was looking for a 0.1% gain) and up 0.1% on core (consensus was for a 0.2% gain). The YoY prints matched estimates at 1.4% and 1.8%, respectively.
Muted inflation pressures support the case for additional Fed cuts, something Donald Trump habitually points out on Twitter, when opining on the “proper” course for monetary policy ahead of an election year. In that regard, Friday’s data points to scope for more easing, although recent chaos in money markets has shifted the focus to balance sheet policy at a time when the dot plot is largely ambiguous.
Meanwhile, orders for non-military capital goods (ex.-aircraft) put up their worst showing since April last month, an apparent case of collateral damage from global economic concerns and incessant protectionist bombast.
All in all, it’s not terrible. But it’s not “great” – “again” or otherwise.
