US jobless claims rose last week, but remain in a middling range vs recent history. “The sideways drift in initial and continuing claims in recent months suggests that layoff activity is muted,” Thomas Simons, chief U.S. economist at Jefferies, wrote in a note. “The ‘no hire/no fire’ theme in the labor market remains firmly intact.”
President Trump’s new round of “reciprocal” tariffs kicks in today, a shift that focus attention anew on forecasts by many economists that the levies on imports will raise inflation, if only temporarily. The outlook will be stress-tested with next week’s July data for the consumer price index (CPI), set for release on Tues., Aug. 12.
Trump’s new tariffs take effect today, affecting imports from dozens of countries. Most imports into the are now subject to a baseline 10% duty, with the overall average effective tariff rate rising to more than 17% — the highest since 1935.
Markets are all in on predicting that the Federal Reserve will cut interest rates at the next policy meeting on Sep. 17. But there could be a wild card in the deck. A key macro question between now and then: Will the next two updates on consumer inflation persuade the Fed to leave rates unchanged – or perhaps raise rates?
US services sector flatlined in July, based on the ISM Services Index. The survey-based profile of the sector, which dominates US economic activity, fell to a near-neutral reading last month. A competing survey, however, reported stronger activity for services: “Growth gained momentum in the US service sector during July,” according to the S&P Global US Services Index.
Judging by the headlines, it’s tempting to conclude that a US recession is imminent. Looking at a broad array of macro indicators, by contrast, still leaves room for debate.
US factory orders fell sharply in June. Orders have now fallen in two of the past three months. New orders contracted 4.8% from May. Excluding the volatile transportation sector, orders rose 0.4%.
The bond market looks increasingly focused on slowing economic growth vs. tariff inflation. The two risk factors have kept the US 10-year yield trading in a range in recent weeks as investors weighed which threat was more pressing. Following Friday’s weaker-than-expected payrolls data for July, along with sharp downward revisions for hiring in the previous two months, Treasuries rallied, pushing yields abruptly down — a shift that suggests market sentiment is now prioritizing a softer economy as the leading driver for bonds.
US hiring rebounded in July, but only modestly, following two months of near-stagnant increases. The 73,000 increase in nonfarm payrolls last month was well below expectations, and raises concern that the labor market will continue to slow. “There’s no way to pretty-up this report. Previous months were revised significantly lower where the labor market has been on stall-speed,” said Brian Jacobsen, Chief Economist at Annex Wealth Management. “Last year the Fed messed up by not cutting in July so they did a catch-up cut at their next meeting. They’ll likely have to do the same thing this year.”
● The Progress Trap: The Modern Left and the False Authority of History
Ben Cobley
Summary via publisher (Polity)
The idea of progress, one of the animating ideas of Western civilization, has now gone global. From Marxism and neoliberalism to today’s mutant identity politics, it offers a framework of knowledge and confidence: an assurance that things will get better and that history is on our side. However, in doing this it creates a form of authority that is simultaneously imaginary and dishonest, resting on confidence in a future that is really contingent and unknowable.In The Progress Trap, Ben Cobley looks at this progressive mindset as a form of power, conferring a right to act and control others. ‘Change’, ‘transformation’ and the ‘new’ are the superior values, meaning destruction of the old: people, cultures and nature. It is a trap into which nearly all of us fall at times, so attractive are its stories and familiar its techniques.