Since the Federal Reserve’s last meeting several weeks ago, the economy has cooled down. According to the minutes, “various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate.”
With some of this data being outdated, such as the consumer price index being weaker and the labor report indicating a cooling economy, policymakers may have to change their plans.
On May 22, oil was on the decline, copper prices slumped, and “shares from the U.S.’s largest copper producer, Freeport- McMoRan, sank,” explained CNBC.
As of today with “downward revisions to consumer and equipment spending and a key measure of inflation ticked down, keeping the Federal Reserve on track to possibly begin cutting interest rates before the end of the year.”
The Commerce Department reported that the gross domestic product grew at an 1.4% annualized rate from January through March. Reuters noted that “[d]etails of the report showed that consumer spending growth, revised down by 0.5 percentage point to a 2.0% annualized rate, mostly reflected a larger-than-earlier-reported drop in household spending on goods.”
In another report the gap between exports and imports was at the highest level since May 2022, “as strong domestic demand for imports was not matched by export trade.”
The Labor Department showed data for initial claims for state unemployment benefits rising 3,000 to a seasonally adjusted 219,000 for the week ending May 25, 2024. “The so-called continuing claims tracking those who collect benefits beyond the first week rose 4,000 to a seasonally adjusted 1.791 million during the week ending May 18.” (Reuters)
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