KPMG Economics

Economic Coordinates

Explore analysis of key data indicators, such as job creation and the labor market, consumer spending, inflation, investment, housing and monetary policy. These combined data points are indicators of the overall health of the economy.

• With a September rate cut seen as a virtual done deal, questions turn to how far and how fast Fed will ease | MarketWatch
  With U.S. inflation softening and concerns abating that the economy was overheating, economists are fairly certain the Federal Reserve will lower its benchmark interest rate in September for the first time this cycle. What happens next is up in the air. "The terrain is bumpy and what makes it hard is the Fed is on a tightrope," said Diane Swonk, chief economist at KPMG Economics.
  July 27, 2024 | MarketWatch 

• CrowdStrike IT outage: a global meltdown | MoneyWeek (UK)
  Millions were affected by the CrowdStrike IT outage recently, which grounded flights and took the news off the air. Was this just a hiccup or a warning of much worse to come? Millions of people across the globe were affected recently by possibly the most widespread IT outage ever seen. As the global economy becomes more digitalized and interconnected, the threat from crashes, hacks and data breaches will only grow. So the outage should serve as a wake-up call for a world and global economy that is becoming increasingly vulnerable to supply shocks, says Diane Swonk, chief economist at KPMG. That also “makes for a world that’s more susceptible to bouts of inflation,” as witnessed during the pandemic.
  July 26, 2024 | MoneyWeek (UK) 

• What does it mean for the economy when businesses grow their inventories? | NPR Marketplace
  Senior economist Meagan Schoenberger from KPMG highlighted that the increase in U.S. business inventories in May was influenced by new tariffs and auto dealers restocking after pandemic-related supply chain issues. But there are a bunch of other variables in this equation, said senior economist Meagan Schoenberger with KPMG. “There’s also the fact that new tariffs went into effect in May,” Schoenberger said. “And so, there was a lot of stocking up of those affected products.” She also mentioned that businesses are preparing for a record-breaking storm season, which has led to early stocking of products like Halloween decorations.
  July 17, 2024 | NPR Marketplace

• Housing Market Gets Good News About a Critical Problem | Newsweek
  More newly built homes coming on line is good news for the extremely supply constrained housing market, but not all regions are seeing significant supply becoming available," Yelena Maleyev, KPMG senior economist, said in a note shared with Newsweek.
  July 17, 2024 | Newsweek

• The U.S. economy faces a new threat | CNN
  The unemployment rate remains historically low, but it has noticeably crept higher three months in a row — “a sign the labor market may be turning,” according to economists at KPMG. In a Monday report, KPMG senior economist Ken Kim noted that the unemployment rate is close to triggering the Sahm Rule, which signals a recession has started when the three-month moving average of the unemployment rate increases by 0.5 percentage points or more above the three-month average. Kim also pointed to how the services sector — a key engine of growth for the U.S. economy — is suddenly showing signs of weakness. “No longer is inflation the predominant concern,” Kim wrote. “Equally as worrisome for the Fed should be the potential for a sharper deterioration in the labor market and economic activity. A soft landing is the goal but a hard landing is emerging as a tail risk.”
  July 10, 2024 | CNN

• Bankrate’s Q2 Economic Indicator Survey: What economists see for the job market, inflation, the Fed and more in the year ahead | Bankrate
  To the outside viewer, the Federal Reserve looks like it’s come close to achieving the impossible soft landing of the U.S. economy. Interest rates are the highest in more than 20 years and inflation is nearly a third of what it used to be, yet unemployment remains historically low and a recession is nowhere to be found. The nation’s top economists, however, say the U.S. central bank might not want to get too comfortable just yet. “More disinflation is in the pipeline, as lower goods and energy prices, combined with cooling housing costs that show up in the inflation indices with a lag, will help bring overall inflation closer to the Fed's 2% target by the end of 2024.” said Yelena Maleyev, Senior Economist At KPMG.
  July 10, 2024 | Bankrate

• Fed's Powell: Prices are ‘back on disinflationary path,’ but more confidence is needed | Fox Business
  KPMG chief economist Diane Swonk reacts to the Federal Reserve's decision to leave interest rates unchanged on 'The Claman Countdown.'
  July 02, 2024 | Fox Business