Personal Income and Outlays, July 2024

Economic

Summary:

Personal income increased $75.1 billion (0.3 percent at a monthly rate) in July, according to estimates released by the U.S. Bureau of Economic Analysis.

Personal income increased $75.1 billion (0.3 percent at a monthly rate) in July, according to estimates released by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI), personal income less personal current taxes, increased $54.8 billion (0.3 percent) and personal consumption expenditures (PCE) increased $103.8 billion (0.5 percent).

The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.2 percent . Real DPI increased 0.1 percent in July and real PCE increased 0.4 percent; goods increased 0.7 percent and services increased 0.2 percent.

The increase in current-dollar personal income in July primarily reflected an increase in compensation.

The $103.8 billion increase in current-dollar PCE in July reflected an increase of $59.3 billion in spending for services and $44.5 billion in spending for goods. Within services, the largest contributor to the increase was housing and utilities (led by housing). Within goods, the largest contributors to the increase were motor vehicles and parts as well as food and beverages.

Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased $103.3 billion in July . Personal saving was $598.8 billion in July and the personal saving rate—personal saving as a percentage of disposable personal income—was 2.9 percent.

Prices

From the preceding month, the PCE price index for July increased 0.2 percent . Prices for goods decreased by less than 0.1 percent and prices for services increased 0.2 percent. Food prices increased 0.2 percent and energy prices increased by less than 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

From the same month one year ago, the PCE price index for July increased 2.5 percent. Prices for goods decreased by less than 0.1 percent and prices for services increased 3.7 percent. Food prices increased 1.4 percent and energy prices increased 1.9 percent. Excluding food and energy, the PCE price index increased 2.6 percent from one year ago.

Real PCE

The 0.4 percent increase in real PCE in July reflected an increase of 0.7 percent in spending on goods and an increase of 0.2 percent in spending on services. Within goods, the largest contributor to the increase was motor vehicles and parts. Within services, the largest contributor to the increase was health care.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Warren Takunda

Stocks

Asian shares mostly declined Tuesday as investors looked ahead to a key report on U.S. employment set for release later in the week.

Japan’s benchmark Nikkei 225 erased earlier gains to finish less than 0.1% lower at 38,686.31, while Australia’s S&P/ASX 200 fell less than 0.1% to 8,103.20.

The closely watched U.S. jobs data is expected to influence the Federal Reserve’s read on the American economy and when it will start lowering interest rates. The move will have repercussions through global markets, including Asia.

“It is shaping up to be a significant litmus test. A stronger-than-expected payroll number, paired with a lower unemployment rate, could inject some much-needed confidence into the market, signaling that growth risks might be easing, at least for now,” said Stephen Innes, analyst at SPI Asset Management.

“If the report disappoints, especially if it pushes the unemployment rate higher, we could quickly see growth concerns flare up again.”

A wait-and-see mood was earlier prevalent, as Monday was Labor Day, a national holiday in the U.S.

South Korea’s Kospi initially rose after a report showed consumer inflation slowed in August to the weakest in more than three years, supporting expectations of an easing of monetary policy. The Kospi later declined 0.6% to 2,664.63.

South Korea’s consumer price index, or CPI, rose 0.4% from the previous month and 2.0% from a year earlier, after gaining 0.3 from a month earlier and 2.6% on-year in July.

Hong Kong’s Hang Seng dipped 0.4% to 17,624.35, while the Shanghai Composite edged down 0.3% to 2,803.99.

Worries were also growing about the resilience of China’s economy, as recently disclosed data showed a mixed picture. Recent weak earnings reports from Chinese companies, including New World Development Co., a property developer and investor, added to the pessimism.

In energy trading, benchmark U.S. crude rose 53 cents to $74.08 a barrel. Brent crude, the international standard, lost 15 cents to $77.37 a barrel.

In currency trading, the U.S. dollar slipped to 146.00 Japanese yen from 146.89 yen. The euro cost $1.1061, down from $1.1074.

Source: AP

Risk Warnings and Disclaimers

Add to Favorites

FOREX.com

Forex

GBP/USD eases lower despite consumer spending rising

Consumer spending rose in August GBPUSD eases after strong gains in AugustGBP/USD tests 1.3140 support

GBP/USD is easing lower on Tuesday against both the US dollar and the euro as investors book profits following sterling's impressive monthly rally in August. GBP/USD booked the strongest gains in 10 months in August as the USD fell 2.2% in August against its major peers.

The pound is drifting lower today despite UK consumers showing signs of life in August. UK consumer spending increased modestly last month, boosted by spending on food and drink amid warmer weather, adding to signs of steady economic growth in H2 of 2024.

According to Barclays, consumer spending on credit and debit cards rose by 1% in August after two months of declines, and according to the British Retail Consortium, spending in shops rose by 1%, its strongest pickup since March.

The data supports the view that consumers could increasingly support the economy in the second half of the year amid growing real incomes, easing interest rates, and improving consumer confidence.

Meanwhile, the US dollar is inching higher today against its major peers, hovering around a 2-week high as traders come back from the long weekend and look at US ISM manufacturing data.

GBP/USD forecast – technical analysis

After running into resistance at 1.3265, GBP/USD has eased lower, testing support at 1.3140, the July ’23 high. The pair remains within the ascending channel dating back to late April.

Should the support hold, buyers will look to rise back towards the 1.3230 trendline resistance, ahead of 1.3260 and fresh YTD highs.

Should buyers break meaningfully below 1.3140, the next support is seen at 1.30, the round number, and the mid-line of the rising channel.

GBP/USD, USD/JPY Forecast: Two Trades to Watch_1

USD/JPY looks to ISM manufacturing PMIs ahead of a busy week

US ISM manufacturing PMI forecast to rise to 47.5Data this week could confirm or refute recession fearsUSD/JPY eases to 146.00

USD/JPY is falling after four straight days of gains. The yen is rising towards 146, rebounding from two-week lows, as it tracks a rally in Japanese government bond yields amid a hawkish outlook for BoJ's monetary policy.

Bank of Japan policymakers have recently supported a more hawkish stance should economic projections materialize, and the markets are betting that the central bank will raise interest rates again in December.

Yesterday, Japanese manufacturing PMI was revised modestly higher to 49.8 from 49.5, heading closer to stabilisation.

Today, the USD is holding steady as traders return from the long Labour Day weekend. Attention will be on the US ISM manufacturing survey, which will kick off a busy week for U.S. economic data.

The ISM manufacturing PMI is expected to improve slightly to 47.5 but remains below the 50 level, which separates expansion from contraction.

The data comes ahead of ISM services figures later in the week and Friday's non-farm payroll report. This week's data will either confirm or refute US recession concerns, which were sparked a month ago following a weaker-than-expected US non-farm payroll report.

The market expects the Federal Reserve to cut interest rates in September. However, the size of that rate cut is still up for debate, with the market pricing a 33% probability of a 50 basis point rate cut. Stronger data this week could help rein in expectations of a larger rate cut, lifting the US dollar.

USD/JPY forecast - technical analysis

USD/JPY recovered from support at 143.50 before stalling at 147.20. The price is testing support at 146.40, the 23.6% fib level of the 161.90 high and 141.70 low.

Sellers need to remove 146.40 and 145 round numbers to bring 143.50 back into sight. Below, 141.70 comes into focus.

On the upside, should 146.40 hold, buyers will look to extend gains towards 149.40, the mid-August high and the 38.2% fib level. GBP/USD, USD/JPY Forecast: Two Trades to Watch_2

GBP/USD, USD/JPY Forecast: Two Trades to Watch_2

Risk Warnings and Disclaimers

Add to Favorites

Banque de France

Economic

Our survey of approximately 8,500 companies and establishments was conducted between 22 July and 5 August. As the period covered coincides with the summer holidays and the Paris Olympic and Paralympic Games (the economic effects of which are only partially captured by the survey), the results and expectations need to be interpreted with caution. According to surveyed business leaders, activity rose in July in market services and construction, and remained little-changed in industry. For August, businesses expect activity to increase in services and industry but to decline in construction. Order books are still deemed weak in almost all industrial sectors, with the notable exception of aeronautics. In the structural works segment of construction, they remain well below pre-Covid levels, due to stagnation in the construction of new builds. Our uncertainty indicator, based on comments from surveyed businesses, has eased slightly, but nonetheless remains high after the strong jumpin our previous survey (conducted between the end of June and start of July), which was linked to the electoral context.

According to industrial firms, selling prices continued to moderate in July against a backdrop of slight growth in raw materials prices. In industry and construction, the proportions of businesses that raised their prices (6% and 3% respectively) were close to pre-Covid July levels.

At the same time, the proportions reporting a drop in their prices (4% and 9% respectively) exceeded pre-Covid levels. In market services, the share of businesses reporting a rise in their prices (8%) is still in the process of normalising.

Recruitment difficulties continued their slow decline, with 33% of businesses mentioning them in July, down from 35% in June.

Based on the survey results, as well as other indicators, we expect GDP to rise significantly in the third quarter of 2024: underlying growth should be around 0.1-0.2%, and the temporary impact of the Paris Olympic and Paralympic Games should add another quarter point. This forecast is subject to both upside risks, linked to possible spillover effects from the Olympic Games, and downside risks stemming from the political uncertainty.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Thomas

Commodity

MUMBAI (Sept 3): India's palm oil imports in August fell more than a quarter from a month ago on ample stocks and as negative margins prompted refiners to curtail purchases of the tropical oil, five dealers said on Tuesday.

Lower purchases by the world's biggest importer of vegetable oils could lead to higher stocks of palm oil in key producers Indonesia and Malaysia, weighing on benchmark futures.

Palm oil imports fell 27% in August from the previous month to 791,000 metric tonnes, according to estimates from dealers.

"In July, imports were substantially higher than local requirements, so refiners curtailed imports this month," said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.

"Furthermore, after the recent price rise in palm oil, it became as expensive as soyoil, providing no incentive to purchase palm oil."

Palm oil typically trades at a discount to soft oils, but it is currently being offered at the same price as competing soft oils for September shipments.

The refining margin flipped to negative territory for palm oil in August, which prompted buyers to curtail purchases, said Rajesh Patel, managing partner at edible oil trader and broker GGN Research.

Soyoil imports in the month jumped 16% to 456,000 metric tonnes, the highest in more than two years, dealers said.

Over the past month, local rapeseed oil prices have increased by more than 8%, which is prompting some refiners to blend rapeseed oil with comparatively cheaper soyoil, said a Jaipur-based edible oil trader.

Sunflower oil imports fell 21% in August to 288,000 metric tonnes, dealers said.

The drop in imports of palm oil and sunflower oil brought down the country's total edible oil imports by 17% to 1.53 million tonnes, as per dealers' estimates.

India is considering an increase in import taxes on vegetable oils to help protect farmers reeling from lower oilseed prices, two government sources said on Wednesday.

India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

Industry body the Solvent Extractors' Association of India (SEA) is likely to publish its data on August imports by mid-September.

Source: The edge markets

Risk Warnings and Disclaimers

Add to Favorites

FOREX.com

Forex

EURUSD Outlook

As we enter September, both the Fed rate cut, and ECB rate cut are looming on the horizon. The EURUSD is entering the month in a corrective mode as the US Dollar index respects the December 2023 support. The upcoming US employment indicators are set to fuel or reverse the current trends, providing further clarity on the upcoming direction of the Fed decision, and making room for an ECB rate cut effect on the chart respectively.

Gold Outlook:

Amid rising ceasefire pressures in the prolonged conflict between Israel and Hamas, gold remains sensitive to these developments as it trades near the 2500 mark. Despite monetary policy expectations and ongoing ceasefire discussions, gold has been unable to break above the 2530 level since August 20, forming a strong resistance barrier.

Technical Outlook

EURUSD, Gold Outlook: EURUSD – Daily Time Frame – Log Scale EURUSD, Gold Outlook: Rate Cuts vs Geo Tensions_1

The EURUSD is nearing a support zone from both a price and Relative Strength Index (RSI) perspective. The daily RSI is approaching its neutral zone, while the chart approaches the lower end of the 1.10 range, with potential support at the 1.1040 level.

Key levels to watch on the upside include the 1.120 and 1.13 zones. On the downside, a break below the 1.10 barrier could pave the way for key support levels at 1.09 and 1.08. A definitive breakout for EURUSD would occur above the 1.13 mark, while a drop back into consolidation would signal further indecision before a clear trend emerges.

From the perspective of Gold

EURUSD, Gold Outlook: XAUUSD – Daily Time Frame – Log Scale EURUSD, Gold Outlook: Rate Cuts vs Geo Tensions_2

Gold continues to trade above the 2500 mark, maintaining a bullish bias. Drops are viewed as buying opportunities, aligning with the lower boundary of its primary channel near the 2465 and 2440 levels. A further decline below 2440 could increase bearish pressures towards 2414 and 2380.

On the upside, a clear range is defined below the 2530 mark. A close above this level is needed to forecast a move toward the upper end of the 2500 range, with 2580 as the next resistance level.

The outlook for both Gold and EURUSD remains cautiously bullish, driven by sensitivity to inflation factors, haven demand between precious metals and the US Dollar, and ongoing monetary policies. Shifts in these factors are likely to have a significant impact on the charts' trajectories.

Risk Warnings and Disclaimers

Add to Favorites

Owen Li

Economic

Home prices in India are set to rise steadily over the next few years, driven by demand for luxury properties from cash-rich individuals, according to a Reuters poll of housing experts who forecast rent increases will outpace consumer inflation.

While economic growth in Asia's third-largest economy is likely to outpace its major peers, policy experts warn the benefits are increasingly being funnelled to a select few, leaving millions of job-seekers, especially young people, out of the growth story.

With a supply of affordable homes dwindling and those with cash cornering the property market, many aspiring first-time buyers are being forced to keep renting.

After growing 4.3% last year, national home prices in India were expected to rise 7.75% this year, an upgrade from the 6.0% predicted in May, according to the median forecast from the Aug. 20-Sept. 2 survey of 16 property market experts.

Home prices are then expected to increase 6.0%-6.25% in the next two years. Average home prices in India broadly refer to housing in major cities.

"Housing demand is heavily tilted towards the luxury housing segment. This maintains a seemingly unstoppable growth curve while affordable housing continues to bleed," said Anuj Puri, chairman at ANAROCK Property Consultants.

"Tellingly, there was no new affordable supply. It is little wonder that developers are aligning supply with the prevailing demand and are launching more luxury housing projects now."

In a country of over 1.4 billion people, demand for housing is driven by a few, yet the sheer scale of the market is staggering, offering developers incentives to focus on the ultra-rich as profit margins tighten in the affordable segment.

Ultra-high-net-worth individuals in India typically own more than two properties, with nearly 12% of them planning to buy another home this year, according to Knight Frank's wealth data.

Even after the Reserve Bank of India (RBI) raised interest rates by 250 basis points from May 2022 to Feb. 2023, India's housing market trends barely moved. A post-pandemic frenzy among high-income earners fueled rising prices, further stretching affordability.

When asked what will happen to affordability for first time home buyers over the coming year, property market experts were nearly split, with 10 saying it would improve and eight saying worsen.

"First we have to agree this market is not for everyone. There's a bare minimum income for entry, and with income expected to grow faster than house prices in tier-one cities, affordability will improve only for those who are wealthy and generate enough income," said Pankaj Kapoor, managing director at Liases Foras.

"If your income is 5-10 lakh rupees ($5,961-$11,922), which is average, and the house price is over 50 lakh, you cannot afford in the cities where the jobs are. Even if you find something within your budget, it will be in a far-off location, making it impractical to live there and commute to work."

Ajay Sharma of Colliers International said housing affordability will worsen as housing value increases outstrip salary growth and added "key residential hubs in Bengaluru, Mumbai, Pune and Gurgaon will continue to see rental increases due to focused demand."

A lack of well-paying jobs in smaller towns is driving people to flock to larger cities in search of better opportunities, which has pushed rents much higher in the last few years.

When asked how much will average urban home rents change in India over the coming year, 16 housing experts gave a median forecast of 6.5%-10%, outpacing a consumer price inflation forecast of around 4.5% for the next two fiscal years.