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TABLE-The latest in key economic data ahead of Fed's Sept. 20-21 meeting

·7 min read

Sept 2 (Reuters) - The U.S. central bank has lifted interest rates by three-quarters of a percentage point at each of its last two policy meetings, and Federal Reserve Chair Jerome Powell said another "unusually large" increase could be appropriate at the Fed's Sept. 20-21 meeting, depending on whether economic data points to progress in reducing the highest inflation in four decades. Data Friday showed the U.S. labor market is going in the right direction for the Fed, as demand for labor appears to be easing, labor supply is on the rise, and wage growth is moderating. Fed funds futures traders still see a 75 basis point rate hike in September as more likely than a 50 basis point increase, according to the CME Fedwatch tool, but the odds are evening. Data on inflation and inflation expectations that will be particularly decisive for the Fed's rate-setting decision are still ahead. Below is a dashboard of some of the key indicators that have been or will be released during the lengthy eight-week gap between the Fed's July and September meetings, and an assessment of their impact on the Fed's calculus. Date Report Data type Result Builds case for Story or against "unusually large" Sept hike? Sept 2 Nonfarm Labor market Employers hired Against: The Fed payrolls (net 315,000 workers in may take comfort jobs & UE August, down from on signs that rate) July; the demand for labor unemployment rate is easing even as rose to 3.7% from supply rises 3.5% as more workers rejoined the labor force Sept 2 Nonfarm Inflation Average hourly Against: payrolls (avg. earnings rose 0.3% Moderating wage hourly in August from growth suggests earnings) July, down from easing upward the previous pressure on month's 0.5% gain. inflation. Sept 1 ISM Industrial Manufacturing For: Activity has manufacturing production activity did not slowed since the (activity slow in August; Fed began raising index) makers of computer rates, but the and electronics lack of progress reported strong last month may demand suggest more pressure is needed. Sept 1 ISM Inflation Prices rose at the Against: Suggests manufacturing slowest since June demand and supply (prices paid 2020 are coming into index) better balance, a key Fed aim. Sept 1 Jobless claims Labor market New unemployment For: The labor benefit claims market remains fell to a tight two-month low Aug 30 JOLTS Labor market Job openings rose For: Demand for unexpectedly in labor remains July, to 11.24 high, despite the million, meaning Fed's aggressive there were nearly rate hikes aimed two open jobs for at slowing growth every job seeker. Data for June job openings was revised higher. Aug 26 UMich consumer Inflation One-year inflation Against: But only inflation expectations expectations fell barely, as outlook (F) to an eight-month longer-term low of 4.8% from inflation 5.2% in July as expectations did gas prices eased; not deteriorate the five-year but neither did inflation outlook they improve. was unchanged at 2.9%. Aug 26 Personal Consumption Spending rose 0.1% Against: Adds to spending & in July, less than evidence of the income expected, after economy softening advancing 1.0% in June Aug 26 PCE price Inflation The Fed's Against: Cooling index preferred inflation inflation measure pressures are a slipped 0.1% last welcome sign, month compared though with June, the policymakers want first drop since to see more April 2020; from a evidence before year earlier it they will feel rose 6.3%, down confident about from 6.8% in June. the direction of price pressures. Aug 25 GDP (2nd read) Economic Q2 contraction was For: While 2 growth more moderate than months in the indicated in the rearview mirror, advance reading it showed from a month consumption had earlier; consumer rebuilt momentum spending revised coming into the up; GDP deflator current quarter revised higher and inflation as measured by the GDP deflator was still far too high Aug 25 Jobless claims Labor market New claims edged For: The lower for a second continuing claims week and both that portion - a proxy and continued for hiring - claims dropped to covered the the lowest in a survey week for month next week's August nonfarm payrolls report, suggesting tight labor market conditions persist Aug 18 Jobless claims Labor market New claims fell For: Still no and the prior week sign of was revised lower widespread job losses Aug 17 Retail sales Consumption Headline flat but For: The Fed the core figure would like to see was up more than consumer demand expected at 0.8% weakening, not from the prior just shifting to month, indicating other spending no real stalling categories as yet in consumer gasoline prices spending drop Aug 12 UMich consumer Inflation The 1-year outlook A wash: On the inflation expectations dropped to 5.0% upside, the outlook (P) from 5.2% but the impetus for five-year long-term expectation ticked expectations to back up to 3.0% rise further from 2.9% appears to have faded but they are not yet moving toward the prevailing pre-COVID trend Aug 11 PPI Inflation Producer prices Against: Like unexpectedly fell, CPI, this and rose less than downside surprise expected even when on inflation has excluding energy markets expecting and food a hike of 50 bps Aug 10 CPI Inflation Headline came in Against: Arguably well below the first expectations and pleasant surprise even the for the Fed on ex-food/energy the inflation component was front in a long softer than most time. BUT ... forecasts officials have been repeatedly burned in prior attempts to call a top, and a lot of the relief came from the drop in gas prices alone Aug 5 Nonfarm Inflation Wage gains were For: no sign yet payrolls (avg. much stronger than that 225 basis hourly expected and the points of earnings) prior month's tightening is increase was putting a dent in revised up the pace of wage gains Aug 5 Nonfarm Labor market Headline jobs For: no sign yet payrolls (net creation of 528k that 225 basis jobs & UE was much stronger points of rate) than expected and tightening is closed the putting a dent in remaining deficit the pace of of jobs lost hiring. during the pandemic Aug 4 Jobless claims Labor market New claims in the For: headline 250-260k range for number inflated a third straight by seasonal week, near the factors, with the highest since NSA new claims November; number closer to continued claims 200k and showing highest since labor market April remains tight Aug 3 ISM services Inflation The prices paid Against: along (prices paid index dropped by with ISM's index) the most in five factory series, years another signal of input price pressures easing Aug 3 ISM services Service Services activity Against: activity (activity sector picked up more consistent index) activity unexpectedly, with with soft-landing new order growth than recession the strongest in four months; employment index contracted moderately for a second month Aug 2 JOLTS Labor market Job openings A wash: declined by the openings-to-unemp most in more than loyed ratio at two years 1.8:1 is down from March's 2:1 high but has further to go Aug 1 ISM Inflation July's index for Against: shows Manufacturing input prices input price (prices paid plunged to lowest pressures easing index) in nearly two notably years Aug 1 ISM Industrial July's factory Against: Manufacturing production activity slowed, indicates further (activity though a bit less ebbing of goods index) than expected demand July 29 UMich consumer Inflation July's final Against: moderate inflation expectations 5-year expectation positive for Fed outlook (F) fell to lowest effort to keep since December inflation expectations anchored July 29 Employment Wage Q2's employment For: indicates Cost Index inflation costs moderated wage pressures less than expected remain sticky Upcoming data: Sept 6 ISM services Service (activity sector index) activity Sept 6 ISM services Inflation (prices paid index) Sept 8 Jobless claims Labor market Sept 13 CPI Inflation Sept 14 PPI Inflation Sept 15 Retail sales Consumption Sept 15 Jobless claims Labor market Sept 16 UMich consumer Inflation inflation expectations outlook (P) (Compiled by Federal Reserve reporting team; Editing by Dan Burns, David Holmes, Paul Simao, Elaine Hardcastle, Susan Fenton and Jonathan Oatis)