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Weekly Economic Monitor – Ch-, Ch-, Changes

By Scott J. Brown, Ph.D., Raymond James

Ch-Ch-Changes – The shift in the Fed’s monetary policy framework was simultaneously a big deal and not much at all. In Chair Powell’s own words, the changes “add up to a robust updating of our monetary policy framework.” However, “to an extent, these revisions reflect the way we have been conducting policy in recent years.”

This Week – Fresh August data begin to arrive, with a focus on Friday’s employment figures. Nonfarm payrolls are expected to rise further, boosted by the hiring of temporary census workers, while the start of the school year may add some noise. The unemployment rate should fall further, partly reflecting a decrease in labor force participation. ISM surveys should be consistent with a moderation in the pace of growth in August (diffusion indices reflect direction, not absolute strength). The Labor Department’s report on jobless claims will shift to additive seasonal adjustment (vs. the previous multiplicative adjustment), which should add about 45,000 to the unadjusted figure (instead of multiplying by 1.22) and make comparisons to previous adjusted figures invalid (as the history won’t be revised).

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