Read the highlights of this week’s commentary from Helios:
- The FOMC cut interest rates by 50 basis points, a move intended to safeguard the economy amidst growing concerns about the labor market. The revised dot plot shows an additional 50 basis points of cuts across the two remaining meetings this year — less than the 75 basis points anticipated by futures markets. The FOMC believes this pace of rate cuts can stabilize the unemployment rate at 4.4%.
- Headline retail sales rose by 0.1% in August, slowing from July’s revised 1.1% increase but exceeding expectations of a 0.2% decline. Sales fell in 8 out of 14 categories as consumers shifted toward more budget-conscious purchases, focusing on discounts, trade-downs, and bulk buying. With weakening job and income fundamentals, Bloomberg Economics forecasts limited upside potential for retail sales in the coming months.
- Industrial production rose 0.8% in August, nearly offsetting July’s revised 0.9% decline and surpassing expectations of a 0.2% gain. However, much of the increase was driven by a recovery in auto and parts manufacturing, which accounted for about two-thirds of the growth.
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