New York CNN
If you are an economist, or ahem, economics reporter, last week would have made a great week for vacay.
It's because new data has been released which have provided more clarity about the US economy. These new data points, as well as other recent metrics will probably dominate discussions when Federal Reserve officials meet this month to discuss monetary policy.
Last week, we heard from a number of them.
They all agreed that interest rates should be raised to bring inflation closer to the 2% central bank target. In May, the Personal Consumption Expenditures Index, the Fed's preferred measure of inflation, was showing inflation twice the target. (More on inflation soon).
Don't expect any rate reductions. Fed officials compare it to buying winter clothing in the summer. It's great to plan ahead, but wearing a winter jacket when the temperature is 90+ degrees outside can be a challenge.
What else did we learn about the economy this week?
Finally, inflation is cooling
Everyone stay calm.
Two sets of data published last week show that inflation is actually cooling down.
The Consumer Price Index released on Wednesday showed that the annual inflation rate dropped from 4% in May to 3% by June. This is the lowest level of inflation since March 2021.
On Thursday, we received the Producer Price Index (PPI) data. This index measures the average changes in prices businesses pay suppliers. The data revealed that wholesale inflation in the United States fell to its lowest level since nearly three years last month.
Fed officials, however, are cautious about the data.
Mary Daly, President of the San Francisco Federal Reserve Bank said that there was no doubt about the positive news regarding inflation. She cautioned that it was too soon to declare victory over inflation.
As my colleague economics reporter Alicia Wallace said, 'the Devil remains in the detail'
Comparing the CPI to the previous year, it is possible that some of its annual rate benefits from base effects. She wrote that June last year was a monumental month: annual inflation rose to 9.1% - the highest level in over 40 years, largely due to record high energy prices.
Even after accounting for these base effects, the inflation rate is still high in several cities across the country.
Some prices don't change as much as others. Gas prices, for example, have dropped almost 30% since last year, but other services, such as tax preparation and haircuts, which are major contributors to inflation, have increased 5.6%.
Mortgage rates are on the rise
It looked for a time like the mortgage rate peaked at 7,08 %, its highest level since November.
Freddie Mac released data on Thursday showing that the average 30-year fixed-rate mortgage rate increased by 0.66% in the week ending 13 July.
Home prices have historically declined due to higher mortgage rates. This is not yet happening for many reasons.
The consumers are feeling much better
Consumers are feeling more optimistic because of the slowing rate of price rises.
The University of Michigan's consumer sentiment data showed the largest monthly increase since 2006 in July. The index has now reached its highest level since Sept 2021.
It doesn't sound like people are predicting a recession. People were much more optimistic before the pandemic, but they are nowhere near that level now.
It's an uncertain time for the global economy. Jamie Dimon is the CEO of JPMorgan Chase - America's largest bank - and he can't predict what will happen.
Dimon was asked by CNN whether the cooling of inflation has given him more optimism about avoiding a possible recession. Dimon replied, "I don't really know if this will lead to a soft land, a mild or hard recession."