Economic indicators

Retail sales showed consumers continue to propel the economy, though the number excluding autos was weaker than forecast.

The producer price index grew 0.1% in August, while the core rate — which excludes food and energy — rose 0.3% in the month, the Labor Department reported Wednesday.

The Federal Reserve’s pre-meeting blackout period started, and although we won’t hear from Fed officials this week, several economic indicators are slated, including inflation data on Wednesday and Thursday and reads of the consumer sector on Friday.

The employment report suggests the economy is slowing, though not to the point of recession.

The Federal Reserve Bank of New York sees a nearly 38% chance of recession by August 2020, up from 31.5% in the July reading.

IHS Markit reported its PMI slipped in August as the ISM manufacturing index declined.

Consumers are still fueling economic expansion, with personal consumption gaining 0.6% in July after a 0.3% rise in June.

Three Federal Reserve Bank presidents said they would cautiously consider supporting a rate cut.

Despite trade issues, consumer confidence slipped only slightly in August, as “consumers have remained confident and willing to spend.”

While some Federal Reserve Bank presidents offered hawkish remarks at the Jackson Hole symposium, the markets still expect a 25 basis point cut, and analysts agree.

Federal Reserve Board Chairman Jerome Powell again pledged the central bank “will act as appropriate to sustain the expansion,” despite “no recent precedents to guide” policy decisions.

Two dissents on the vote to cut rates were the first of Chairman Jerome Powell's term.

“A couple” of Federal Open Market Committee members wanted a 50 basis point rate cut at its July 30-31 meeting, according to minutes released Wednesday, while “several” would have preferred no action.

Every coin has two sides and that is the case with a possible September rate cut.

The debate over yield curve inversion continued, as a summer Friday yielded little economic data, but the market waits to parse the minutes of the most recent Federal Open Market Committee and then eyes will turn to the Federal Reserve Bank of Kansas City’s annual Jackson Hole retreat.

The municipal bond market received a variety of data Thursday suggesting economic strength belying the recession forecast by the 2/10-year Treasury yield curve inversion on Wednesday.

While the consumer price index climbed 0.3% in July, as did the core rate, the broad-based increases are unlikely to continue, according to analysts.

While Monday’s data was low-tier, this week will feature several economic reports that will offer data the Federal Reserve will parse in advance of its September meeting.

The producer price index data is reinforcing the idea that another rate cut is in the cards.

The number of seasonally adjusted initial jobless claims fell 8,000 to 209,000 in the week ended Aug. 3