U.S GDP data leads to a potential Q3 of 3% or higher, again showing the U.S has by far the strongest economy. However, I expect Q4 could be very different as many households have burned through their savings and now relying on credit cards. Another impact for the fourth quarter will be the restart of payments against student loans, after a three year suspension. There is some $1.5 trn in loans outstanding and some companies are using this to attract workers by offering to cover those monthly payments if they join the company!
PCE rose 0.2% for the second month in a row. A consistent 0.17% will bring inflation back to the target 2%. Services remain a concern as they came in at 0.46 MoM against 0.3% in June.
Tomorrow we have NFP data being released. I have been focusing more on the hours and wages as they are inflationary indicators, however, I will start to pay more attention to the actual number with the potential for higher job losses in the future. Jobs available are shrinking fast, as expected, and I expect workers to be less tempted to moving company, in case its last in, first out! Job security, if there is such a thing, will take priority over a higher salary.