The Economic Week Ahead: July 17-21

The good news is that the Federal Open Mouth Committee is prohibited from talking publicly now until July 27. That's the day after the end of the next FOMC meeting, when it is widely expected they will hike the federal funds rate by 25bps to 5.25%-5.50%.  It is also widely expected that will be "one-and-done" for Fed rate hiking for a while. We agree.

The week's economic indicators will mostly show that the economy is continuing to muddle along without an economy-wide recession. We will be looking for signs that the rolling recession in the goods sector is turning into a rolling recovery. The clues should be in June's two regional business surveys conducted by the NY & Philly FRBs (Mon and Wed). More clues will be in June's retail sales report (Tue) and last month's industrial production report (Tue).

June's retail sales should show a solid increase since our Earned Income Proxy for wages and salaries in personal income rose 0.8% last month (chart). However, the airports and restaurants have been packed with American consumers who have been spending more on services and less on merchandise.