Inflation Continues to Come in Below Expectations
|U.S. Review
Inflation Continues to Come in Below Expectations
- The Producer Price Index, Import Price Index and the Consumer Price Index came in slightly below expectations this week, which provides the Fed cover to ease if it feels it needs to.
- Retail sales bounced back in May, with the headline index climbing 0.5% and the core control group category, rising 0.5%. Motor vehicle dealer sales rose 0.7%.
- Industrial production rebounded 0.4% in May, following a revised 0.4% drop the prior month. The early June read on Consumer Sentiment fell 2.1 points to 97.9, likely reflecting concerns about possible Mexican tariffs.
Global Review
Global Growth: Steady Start, Softer Finish?
- This week saw confirmation that the global economy began 2019 on better footing. GDP for the G20 economies rose 0.8% quarter-over-quarter and held steady at 3.3% year-over-year. There are questions, however, as to whether solid growth can be sustained, both for the U.S. and internationally.
- U.K. April data were especially soft, with large drops in both GDP and manufacturing output. Eurozone industrial output also fell in April, while China’s May economic data were mixed.
- Given signs of slowing activity, we forecast noticeably lower global GDP growth for 2019 of 3.2%, down from 3.6% growth seen in 2018.
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