Market Wire, North America

American households slowed spending last month as falling gasoline prices helped offset an increase in services outlays – and the Federal Reserve’s preferred inflation measure rose by less than expected. Data released by the Bureau of Economic Analysis this morning showed inflation-adjusted household outlays climbing 0.2 percent in July – roughly corresponding with a previously-reported flatlining in retail sales. A $33.3 billion increase in spending on services was partly offset by a $9.6 billion drop in spending on goods, with energy costs dragging the number down. In unadjusted terms, personal income rose 0.2 percent month-over-month, led by a solid 0.8...

The Federal Reserve rate-setting committee began considering an eventual deceleration in the pace of monetary tightening at its July meeting, aligning with comments made by Chair Jerome Powell during the post-decision press conference. A record of the discussion showed no concerns raised about the loosening in financial conditions that occurred ahead of the meeting, and appears to ratify the market reaction that unfolded when Mr. Powell said “it likely will become appropriate to slow the pace of increases”. Participants remained determined to bring inflation down to target, noting that price growth “remained unacceptably high”, with several expressing reservations about the...

US retail spending flatlined last month, but underlying consumer demand remained strong, keeping monetary tightening expectations aloft. According to figures published by the Census Bureau this morning, total receipts at retail stores, online sellers and restaurants were roughly unchanged on a month-over-month in July, up 10.3 percent over a year prior. Markets were expecting a 0.1 percent headline gain. Gas station sales fell -1.8 percent month-over-month as global energy prices tumbled. Motor vehicle and parts dealers posted a -1.6 percent loss. Receipts at food services operations rose 0.1 percent, and grocery store sales were up 0.2 percent, but rising food...