Lingering inflation is still at the top of a lot of people’s minds, especially with such a high-stakes presidential election just a couple of months away.
Jerome Powell, the chairman of the Federal Reserve, is expected to address Congress this week for his semi-annual testimony on the state of the U.S. economy, and pundits and economists will try to read the tea leaves to discern whether further benchmark interest rate cuts are in the future.
Meanwhile, consumer spending is starting to slow, which could be good news for those watching the inflation line; on the other hand, consumers watching their wallets could signal a further loss of confidence in the economy. Biden can’t catch a break, can he?
Here’s some of what The Center Square reported on the American economic situation and Powell’s testimony this week:
Both the manufacturing and services sectors activity have fallen in contraction territory, according to the Institute for Supply Management. Construction spending also fell as builders in the private sector continue to confront the higher-for-longer than previously anticipated interest rates environment.
While employment is still growing at a healthy pace, nearly three-fourths of all job creation is concentrated in just two sectors: the Government sector, and the Healthcare and Social Assistance sector. As private sector labor demand declined again last month, wage growth eased further and the unemployment rate moved to its highest level since November 2021.
This week, the Federal Reserve Chair will testify in front of Congress. He is expected to stick to cautious language regarding further progress on the inflation front and the possibility of rate cuts by year’s end. But another weaker than anticipated inflation point could force the Fed’s hand.