Economic Overview - Pre-market futures are improving following the release of major economic numbers, despite a drawback in EU markets due to rising unemployment and inflation in Germany [1] - U.S. indexes are experiencing volatility, with the small-cap Russell 2000 showing gains while other major indexes remain in the red [1] PCE and Inflation Metrics - July Personal Consumption Expenditures (PCE) figures were in-line with expectations, indicating no hindrance to the anticipated 25 basis point rate cut for the September Fed meeting [2] - Personal Income for July increased by 0.4%, the strongest since April, while Personal Spending rose by 0.5%, marking the highest increase since March [3] - The headline PCE Index showed a month-over-month increase of 0.2%, the lowest since May, with a year-over-year increase of 2.6%, consistent with the previous month [4] - Core PCE, excluding food and energy, increased by 0.3% month-over-month and 2.9% year-over-year, indicating stability in inflation metrics [5] Employment and Economic Indicators - Fed Chair Jerome Powell's focus has shifted from inflation to employment concerns, with July's non-farm payrolls showing an increase of 73K, which is below the previous four-month average of 54K [8] - A significant upward revision in PCE would be necessary to alter the current outlook, as weakening employment is influencing the decision for a rate cut [9] Trade and Inventory Data - Advanced Trade in Goods for July reported a deficit of $103 billion, which was more than $10 billion lower than anticipated [10] - Advanced Retail Inventories and Wholesale Inventories both reported a month-over-month increase of 0.2%, indicating stable inventory levels [11] Market Expectations - The upcoming week will feature new jobs reports, including July JOLTS numbers and private-sector payrolls from ADP, leading up to the significant BLS non-farm payrolls report [12]

The U.S. released July's core PCE price index, with the annual rate rising to 2.9%, up from 2.6%, marking the highest level since December 2024. The core PCE monthly rate was 0.3%, compared to 0.1% previously. The overall PCE annual rate was 2.6%, with a monthly rate of 0.2%. ...

REMINDER:U.S. PCE & Core PCE today at 8:30 AM ET.As the Fed’s preferred inflation metric, this print will be closely watched.Consensus:- PCE: 2.6%- Core PCE: 2.9% https://t.co/qlBNxjhvJx ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Consumer Price Index (CPI) and Core Personal Consumption Expenditures (PCE) in the United States for July, indicating trends in inflation and consumer prices. Core Points and Arguments 1. **Core CPI Increase**: July core CPI rose by 0.32% month-over-month, aligning with expectations, while the year-over-year rate increased to 3.06% [1][2][7] 2. **Components Influencing Core CPI**: - **Positive Contributions**: - Airfares increased by 4% month-over-month, contributing 4 basis points (bp) to the core [2] - Used car prices rose by 0.5%, adding 2 bp [2] - Medical care services prices increased by 0.8%, contributing 7 bp, partly due to a record month-over-month increase in dental services prices of 2.6% [2] - **Negative Contributions**: - Hotel prices declined by 1.3%, exerting a 2 bp drag on the core [2] 3. **Core PCE Price Index Estimate**: The core PCE price index is estimated to have risen by 0.26% in July, slightly below the prior expectation of 0.31%, with a year-over-year rate of +2.88% [1][7] 4. **Headline PCE Price Index**: The headline PCE price index is expected to have increased by 0.18% in July, translating to a year-over-year increase of 2.60% [7] Additional Important Information - The report indicates that the shelter components, including rent and owners' equivalent rent (OER), increased in line with previous trends, with rent rising by 0.26% and OER by 0.28% [2] - The report will be updated following the Producer Price Index (PPI) report and the import prices report later in the week [1][7] Conclusion - The data presented in the report provides insights into inflation trends in the U.S. economy, highlighting both positive and negative influences on consumer prices, which are critical for investment decisions and economic forecasts.

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - June core CPI rose 0.23% month-over-month, slightly below consensus expectations, with a year-over-year rate of 2.93% [1][2] - Lower hotel prices and used car prices negatively impacted the core CPI, while increases in household furnishings, recreation commodities, apparel, and auto parts prices provided a positive boost [1][2] - The Empire manufacturing index increased significantly in July, indicating stronger-than-expected growth in employment, new orders, and shipments [1][6] Summary by Relevant Sections Core CPI Analysis - The month-over-month core CPI increase of 0.23% was below the median forecast of 0.3%, while the year-over-year rate reached 2.93% [2] - Declines in lodging prices (-2.9%), used car prices (-0.7%), and new car prices (-0.3%) weighed on the core CPI [2][4] - Positive contributions came from household furnishings (+1.0%), video and audio prices (+1.1%), and medical care services (+0.6%) [4] PCE Price Index Estimation - The core PCE price index is estimated to have risen 0.29% in June, with a year-over-year rate of +2.75% [1][5] - The headline PCE price index is expected to have increased by 0.32% in June, corresponding to a year-over-year increase of 2.55% [5] Empire Manufacturing Index - The Empire manufacturing index rose by 21.5 points to 5.5 in July, surpassing consensus expectations [6] - Key components such as employment, new orders, and shipments all showed significant increases, indicating robust manufacturing activity [6]

Group 1 - Pre-market futures are down, with the Dow down 90 points, S&P 500 down 16 points, and Nasdaq down 80 points, while bond yields are at +4.32% for the 10-year and +3.98% for the 2-year [1] - The monthly PCE report indicates that inflation is warming up, which is not what analysts were hoping for, especially with tariff measures expected next week [2] - Personal Income for February increased by 0.8%, exceeding expectations, while Personal Spending rose by 0.4%, indicating a positive consumer performance [3] Group 2 - The headline PCE Index showed a month-over-month increase of 0.3% and a year-over-year rate of 2.5%, both above the Fed's target of 2% but within a manageable range [4] - Core PCE, excluding food and energy, increased by 0.4% month-over-month and 2.8% year-over-year, both figures slightly above expectations, indicating a gradual rise in inflation [5] - Consumer Sentiment for March dropped to 57.9, the lowest in two and a half years, with inflation expectations rising to 4.9% from 4.3% [6] Group 3 - Upcoming Jobs Week will provide insights into the labor market, with various reports expected to clarify whether the market is weakening [7] - The previous Employment Situation report indicated 151K new jobs filled and an unemployment rate of 4.1%, suggesting a robust domestic workforce [8]