When it comes to economic reports, that was some week last week.
The Federal Reserve didn't cut its key interest rate. The jobs report was weak. Surveys suggested consumers weren't as freaked about the economy as they had been in April.
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The president, however, imposed higher tariffs on goods imported from a number of countries. The stock market engaged in some wild gyrations, ending the week lower, but, at least, bond yields came down.
In part because there aren't many big economic reports ahead this week, it's a good time to take stock of what's happening in and around the economy.
Related: Stocks will try to recover their mojo this week
There's a good chance oil prices are headed lower
Maybe you missed this one, but members of the OPEC + countries may boost crude oil production to boost revenue. The operative phrase is “may boost” production. It was clear Saturday but not as clear on Sunday.
Brent crude, the global benchmark settled at $69.67 per barrel and has been slowly declining since peaking on Jan. 15 at about $82 a barrel.
The 11 OPEC+ members include Russia, Mexico, Oman, Kazakhstan and Malaysia.
Assuming output is boosted, global oil prices — and gasoline prices — should come down, just in time for autumn when summer vacations in the northern hemisphere end and drive less. And the result: Prices come down.
AAA said Sunday the national average price of gasoline was $3.15 a gallon, off slightly from Saturday and down 9.4% from a year ago.
More oil supply on the market won't do much for energy stocks. The Energy Select Sector SPDR exchange-traded fund (XLE ) is off 9.1% since peaking at $94.21 on April 2.
Lots of changes coming at the Fed
Donald Trump may seethe every time he sees Jerome Powell speak on television, but he will soon be influencing a big chunk of the seven-member Federal Reserve Board of Governors.
Fed governor Adriana Kugler announced Friday she's resigning Aug. 8 to return to a teaching job at Georgetown University after just two years as a Fed board member.
So, the president gets to nominate someone more to his liking — that is, cut rates when he says cut.
Related: Veteran trader posts a major warning for the stock market
Trump appointed Christopher Waller and Michelle Bowman as Fed governors — as well as Powell. They dissented in the vote not to cut rates last week.
Powell, a Republican, was a Barack Obama appointee to the Fed. Trump elevated him to chairman in 2018, replacing Janet Yellen. Joe Biden nominated Powell to a second four-year term in 2021.
Powell's term as chairman ends in May. Trump would prefer to replace him sooner. Powell would not support the president's demand for deep cuts to the Fed's key federal funds rate, still at 4.25% to 4.5%. The rate forms the foundation of short-term U.S. interest rates.
Potential successors include Kevin Warsh, a former Fed governor; Kevin Hassett, director of the National Economic Council, and, possibly, Treasury Secretary Scott Bessent.
Jobs jobs jobs won't go away
The furor over the firing of Erika McEntarfer as commissioner of the Bureau of Labor Statistics may take a little time to fade away.
The president fired McEntarfer Friday because the BLS issued revisions to earlier jobs reports that drastically cut down how many jobs were created in May and June.
The president said McEntarfer rigged the report to make him look bad, but offered no evidence.
Related: Ford CEO predicts huge industry shift after latest tariff developments
How the monthly jobs report is produced could use some clarification.
The BLS works on a jobs report three times: when it's issued, and each of the next two months. The two revisions reflect that more data on a given month is collected, and the original numbers are revised.
The reason for the revisions is the first report is, at best, a guestimate with data collected from 60,000 businesses and other employers and households by BLS staff by phone and, more lately, online.
Response rates have been falling in recent years from as high as 90% in 2013 to 67% in July. There is a fourth revision in the next year once year-end state tax data is collected and matched up with BLS data.
It takes so long to get all the data right because of staffing shortages and the time demands of many employers. And, of course, mistakes are made.
McEntarfer was appointed to the job during the Biden Administration and easily won Senate confirmation. The next BLS commissioner will be a Trump loyalist.
More Economic and market analysis:
- Tariffs cause August grocery price surge: Five foods hit hardest
- Massive Jerome Powell Error Roils the Market
- Former Federal Reserve official sends bold message on ‘regime change'
- The market decline has not run its course
The reports due this week
The week after the jobs report sees relatively few economic reports. Here's a rundown of what's coming.
Monday: Factory orders, with estimates projecting a decline.
Tuesday: U.S. Trade deficit. The estimate is a $61 billion positive. Two reports on services ordered by purchasing managers will come from Standard & Poor's and the Institute for Supply Management. Both are expected to be slightly positive.
Wednesday: None. But Fed governor Lisa Cook and Susan Collins, president of the Boston Federal Reserve Bank expected to speak in the afternoon.
Thursday: The weekly report on initial jobless claims plus a report on productivity and unit labor costs. All from the BLS. The Federal Reserve's monthly Consumer Credit Outstanding.
