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.

• 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

• The Exchange: KPMG still expects December rate cut following May jobs report | CNBC TV
  CNBC’s Steve Liesman and Diane Swonk, KPMG chief economist, join CNBC’s ‘The Exchange’ to discuss the May jobs report, implications for a potential rate cut, and more."
  June 07, 2024 | CNBC TV

• Here's the 'bad news' in the 'good' jobs report | CNN
  At a time when Americans and the Federal Reserve are clamoring for clear-cut data about the state of the economy, Friday's jobs report was much more opaque than everyone had hoped. "The good news is we saw the explosion in payrolls. The bad news is the rise in unemployment with an acceleration in wage gains," Diane Swonk, chief economist with KPMG, told CNN. "The Fed doesn't directly target wages; but where the wages picked up are in the [service sector] areas where we've seen the most inflation," Swonk said. That's in the service sector, everything from personal care services, dry cleaning, cleaning and home maintenance and vehicle maintenance, she said. "And that is something that is hard for the Fed, because in order for some of the increases we're seeing in the service sector, we need to see offset in goods prices in order to bring inflation down," she said. "But you need a lot of that consistently to deal with stickier inflation that we're seeing in the service sector; and, unfortunately, wages matter more in particular areas where inflation has gotten stickiest."
  June 07, 2024 | CNN

• How many jobs are available in technology in the U.S.? | Computerworld
  “The labor market posted solid if not spectacular gains,” Diane Swonk, chief economist and managing director at KPMG LLP, wrote in a blog post. “Hiring in both the public and the private sectors slowed. Hiring by firms with less than 250 workers continues to drive gains in the private sector. Those firms are the most vulnerable to the recent tightening of credit conditions,”
  June 07, 2024 | Computerworld

• What the May Jobs Report Means for Small Businesses | Inc
  The unemployment rate "changed little" from its relatively low levels in this report, though it did reach 4% for the first time in more than two years. And the quits rate in the JOLTS report remained at 2.2% for the sixth consecutive month in April. Wage growth, though gradually declining, accelerated 0.4% month-over-month in May and 4.1% year-over-year--up from April. "It's expensive for businesses to offer the kinds of wages to stay competitive in this market," says Yelena Maleyev, an economist at KPMG.
  June 07, 2024 | Inc.

• U.S. Payroll Gains Not as Robust as Reported, New Data Suggest | Bloomberg
  The U.S. job market may be a lot less vibrant than Federal Reserve Chair Jerome Powell and his colleagues seem to think. Data published Wednesday by the Bureau of Labor Statistics suggest payrolls might have grown about 60,000 less per month on average last year than the roughly 250,000 run-rate derived from the agency’s monthly employment report. The new figures, from the Quarterly Census of Employment and Wages, cover more than 95% of U.S. jobs. and are eventually used in annual revisions to the monthly data. The Fed needs to be careful as it sorts through the mixed signals emanating from the various labor-market indicators, said KPMG Chief Economist Diane Swonk. “They’ve got to be worried about hitting a tripwire” and triggering a big increase in unemployment, she said.”
  June 06, 2024 | Bloomberg

• A Trump Win Is Seen as a Risk to Fed Independence: MLIV Pulse | Bloomberg
  The Federal Reserve will face a significant risk of losing its independence to ramped-up political interference if Donald Trump is elected president again, according to the latest Bloomberg Markets Live Pulse survey. Forty-four percent of respondents said they expect Trump to seek to politicize the central bank or limit its power if he returns to the White House. A push to roll back the central bank’s independence — a step that would face significant hurdles — would likely rock financial markets, undermining investors’ faith in the Fed as overseer of the world’s largest economy and exposing it to political pressure to cut interest rates. “The bond market would likely be roiled by any real attack on the Fed's independence, with fallout effects on equities," said Diane Swonk, chief economist at KPMG.”
  June 03, 2024 | Bloomberg