Economic Release Snapshot: Inflationary Pressure Remains

Each week, we break down the latest U.S. economic reports, including what the results mean for the overall health of the economy. Here, you will find how economists’ forecasts compare with actual results, key takeaways to consider, as well as a list of what’s on tap for the week ahead. 

Reports for the Week of September 12

Consumer Price Index, July (Tuesday)

• Prior monthly CPI/core CPI growth: 0.0%/+0.3%
• Expected monthly CPI/core CPI growth: ‒0.1%/+0.3%
• Actual monthly CPI/core CPI growth: +0.1%/+0.6%
• Prior year-over-year CPI/core CPI growth: +8.5%/+5.9%
• Expected year-over-year CPI/core CPI growth: +8.1%/+6.1%
• Actual year-over-year CPI/core CPI growth: +8.3%/+6.3%

Both headline and core consumer prices increased more than expected in August, causing year-over-year inflation to exceed expectations during the month.

Producer Price Index, July (Wednesday)

• Prior monthly PPI/core PPI growth: ‒0.5%/+0.2%
• Expected monthly PPI/core PPI growth: ‒0.1%/+0.3%
• Actual monthly PPI/core PPI growth: ‒0.1%/+0.4%
• Prior year-over-year PPI/core PPI growth: +9.8%/+7.6%
• Expected year-over-year PPI/core PPI growth: +8.8%/+7.0%
• Actual year-over-year PPI/core PPI growth: +8.7%/+7.3%

While headline producer price growth came in below expectations on a year-over-year basis, producer inflation remained elevated on a historical basis in August.

Retail sales, August (Thursday)

• Expected/prior month retail sales monthly change: ‒0.1%/+0.0%
• Actual retail sales monthly change: +0.3%
• Expected/prior month core retail sales monthly change: +0.5%/+0.7%
• Actual core retail sales monthly change: +0.3%

Headline retail sales beat economist estimates during the month, as the 0.3 percent increase was well above the modest decline that was anticipated. This solid result highlights the continued resilience of the American consumer despite headwinds created by inflation.

Preliminary August University of Michigan consumer sentiment

• Expected/prior month sentiment: 60.0/58.2
• Actual sentiment: 59.5

Consumer sentiment improved modestly during the month due to declining long-term inflation expectations. While the improvement was welcome, the index still sits below the pandemic-era high of 88.3 we saw in early 2021.

Upcoming Reports for the Week of September 19

National Association of Home Builders Housing Market Index (Monday)

Home builder confidence is expected to decline modestly in September.

Housing starts and building permits (Tuesday)

Permits are set to fall during the month, while starts are expected to increase modestly after falling notably in July.

Existing home sales (Wednesday)

Existing home sales are expected to show a continued decline in August, driven by high prices and mortgage rates.

FOMC rate decision (Wednesday)

The Fed is widely expected to hike the federal funds rate by 75 bps at its September meeting; however, the higher-than-expected consumer inflation in August may lead to a larger-than-expected rate hike at this meeting.