Weekly Economic Briefings - Us Weekly Economic Briefing
As anticipated, the Fed formally adopted flexible average inflation targeting. But, somewhat unexpectedly, it tweaked its employment mandate to be more asymmetric: one in which low unemployment presents less of need to tighten policy so long as inflation remains close to the 2% target. The shift solidified our view that the Fed won’t raise the policy rate until at least mid-2024 and should promote a more inclusive economic expansion. Our Recovery Tracker is building some momentum so far in August. It rose 1.1ppt for a second consecutive week, reaching 79.1 in the week ended Aug. 14. Growth in four of the six dimensions points to relative resilience. But given the fiscal aid impasse, the unchanged demand tracker since the end of July and weakening employment gains are worrisome. We estimate the lapse in federal supplemental unemployment benefits will reduce in August by around $55 billion, or $650bn annualized, and estimate that President Trump’s partial extension will cover payments for only five weeks. The steep decline in federal support will depress consumer confidence and spending and weigh on the broader recovery.
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook