US Economics Weekly "Big week for macro next week" Pingle

Research evidence excerpt

US Economics Weekly "Big week for macro next week" Pingle

mitment to price stability. The Supreme Court is

expected to release additional opinions early in the week, with an opinion in Trump v.

Cook still pending, a potential landmark case concerning central bank independence.

We expect the ISM manufacturing composite rose modestly in June, and lightweight

vehicle sales edged up. The usual run of other labor market data (JOLTS, ADP, job cut

announcements and another week of initial claims) will be released next week too. We

discuss the July 1 deadline for decisions over the path ahead for renegotiations of the

USMCA after page 12. The Week Ahead begins on page 29.

The Week in Review: soft Q2 data and probable peak of headline PCE

Core PCE prices rose 0.32% in May, leaving core inflation at 3.41% over the year in May.

Headline PCE inflation, lifted by elevated energy prices, rose 0.45% in May and rose to

4.07% over the year. We expect May to be the peak for headline PCE price inflation,

though the June core price increase released next month is expected to be strong, before

slowing later this year. FRB of New York President Williams called the current stance of

monetary policy "well positioned" given inflation concerns. Treasury Secretary Bessent

chimed on his view that inflation would fall later this year, and seemed to hint the Fed

should wait and look past the near term energy price shock. Real GDP growth in Q1

revised up 0.5 pp to 2.1% (saar) in the third estimate due to an upward revision in net

exports while real consumption was marked down to just 0.5% annualized growth. Real

spending in May rose 0.26% (3.2% annualized), while the April pace was revised down

to flat, suggesting just an okay pace of spending across the two months, despite bumper

tax refunds.