Weekly Talking Points for Financial Advisors (8/19/24)

Read the highlights of this week's commentary from Helios:

• The Consumer Price Index (CPI) for July increased by 0.2% from June and 2.9% from the previous year, marking the lowest annual rise since March 2021. It’s taken a while, but the elusive sub-3% annual inflation is now a reality, seemingly providing the Federal Reserve with enough justification to cut rates at its September meeting.
• US producer prices increased by less than expected in July, with the Producer Price Index (PPI) rising by 0.1% from June and 2.2% year-over-year. Services costs declined for the first time this year. Components of the PPI that influence the Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures (PCE) price index, showed overall softness.
• July retail sales accelerated by the most since January 2023, rising 1% and surpassing the consensus estimate of 0.3%. Consumers prioritized essential purchases, such as groceries, and held back on discretionary spending. With weakening consumer confidence and a softening labor market, the outlook suggests that spending will likely remain focused on essentials, with discretionary spending expected to decline further.

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