Overview of the August 2019 Snapshot
Real consumer spending rose moderately in June. Real expenditures on nondurable goods rose strongly, while real durable goods expenditures fell modestly. Services expenditures rose slightly.
Retail sales increased solidly in June.
Real business equipment spending remained sluggish in 2019Q2, and its growth over the first half of 2019 was well below its pace in 2018. New orders of nondefense capital goods excluding aircraft remained below shipments in May, and continue to suggest weak near-term momentum.
Housing activity indicators remained soft in June. Existing home sales fell in June,while new home sales only partially rebounded. Single-family housing starts and permits remained anemic. A still-strong labor market and lower mortgage rates could provide more support to housing.
Payroll growth was solid in July, albeit a touch softer than in June. The unemployment rate was unchanged, while the labor force participation rate and the employment-to-population ratio both edged up. Even with a low unemployment rate, some measures of labor compensation growth have flattened in the past few months.
Core PCE inflation remains below the FOMC’s longer-run objective.
U.S. equity indices fell significantly over the past month, while implied volatility rose. Nominal 10- and 30-year Treasury yields declined markedly, and were well below short-term rates. The market-implied expected policy rate path moved down further. The broad trade-weighted dollar index increased. Oil prices declined substantially over the month.
