Economics Group: Weekly Economic & Financial Commentary
An Uneven Recovery will Keep the Fed on Hold
- Retail sales came in unchanged in July, which was below consensus expectations and core sales rose only modestly over the month. The largest declines were in general merchandise, due in part to slower department store sales, and motor vehicle sales. Although retail sales started the quarter off on a disappointing note, we continue to expect consumer spending to increase at around a 2.6 percent pace in the third quarter.
- Much attention is being placed on the timing of the first rate hike. Although there is some discussion of an earlier rate hike, economic conditions still warrant the Fed to take a cautious approach in normalizing policy.
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