China economic slowdown deepens in August
➡️ Retail sales rose 3.4% in August from a year earlier, missing analysts' estimates for a 3.9% growth and slowing from July's 3.7% growth. ➡️ China’s industrial output growth slipped 5.2%, the worst performance since August last year. ➡️ Fixed-asset investment, reported on a year-to-date basis, expanded just 0.5%, a sharp slowdown from the 1.6% expansion in the January to July period. ➡️ China's survey-based urban unemployment rate in August came in at 5.3%. Source: CNBC
US Federal Government Spending as % of GDP...
1950s: 17%, 1960s: 18%, 1970s: 21%, 1980s: 22%, 1990s: 21%, 2000s: 20%, 2010s: 23%, 2020s: 27%. Source: Charlie Bilello
Yesterday, ECB ups inflation outlook for 2025, 2026, cuts it for 2027
2025 Inflation forecast now 2.1% (from 2%), 2026 inflation forecast now 1.7%; (prior forecast 1.6%). ECB sees 2027 at 1.9% (prior estimates 2%). Source: HolgerZ, Bloomberg
Initial jobless claims spiked today, but ex Texas, they look normal for this time of year
Per the Texas Workforce Commission, filings for Disaster Unemployment Assistance related to the lethal floods in the Texas Hill Country earlier this summer were due by September 4... Source: Bespoke
So now we have producer deflation?
US wholesale prices unexpectedly declined in August, a welcome development for investors clamoring for a Fed rate cut next week to boost the economy. Here are the details: PPI MoM: -0.1% vs 0.3% exp. PPI YoY: 2.6% vs 3.3% exp. PPI Core MoM: -0.1% vs 0.3% exp. PPI Core YoY: 2.8% vs 3.5% exp. We had producer deflation in August. Let see what the CPI report will look like tomorrow…
Bloomberg frames the latest bond rally (with yields falling) in a wider context:
“Three years after a surge in inflation pummeled fixed-income markets all around the world, global bonds have finally re-entered bull market territory. Bloomberg’s Global Aggregate Index, which tracks returns on sovereign and corporate debt across developed and emerging markets, has surged more than 20% from its 2022 trough to its highest level since March 2022 amid a broad fixed-income rally. The latest leg higher came as cooling US labor data fueled bets the Federal Reserve would step up policy easing.” Source: Bloomberg, Mo El Erian on X
As highlighted by StockMarkets.news, the payroll downward revision was actually flagged by Powell weeks ago, sneaking it into a footnote in his Jackson Hole speech:
“Data available to date suggest that the level of non-farm payrolls will be revised down materially.” On Sept 9, that’s exactly what happened: -911,000 jobs erased. ➡️ The question now is was this worse than he expected, and does it warrant a 25 or 50 bps cut? Source: StockMarket.news
BLS preliminary benchmark revision comes in way worse than expectations at -911k jobs
That's -229k below consensus -682k and exceeds last year's -818k revision. Two years, 1.7 million phantom jobs erased. The labor market has been far weaker than anyone realized. Source: Matt Cooper @HedgeyeFins
