Despite signs of slowing economic growth in the United States and across the globe, Friday’s employment report showed resilience with 372,000 new jobs created — marking the 14th consecutive month with job growth above 350,000. The strong jobs report is likely to keep the Federal Reserve (Fed) on pace to tighten more aggressively, as markets price in a near-certain 75-basis-point rate hike this month. The tug of war between stubbornly high inflation and slowing growth is almost certain to make the Fed’s job more challenging for the remainder of the year.
This week’s inflation data highlights a busy week of economic releases, with the Consumer Price Index (CPI) release on Wednesday followed by the Producer Price Index on Thursday. The CPI number is expected to again reach the highest level in over four decades, with surging fuel prices contributing to the gain. Friday’s University of Michigan consumer sentiment number will also be closely watched, after June’s release touched the lowest level in the data series dating back to its inception in the mid-1970s.
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