1.Q: How did the August PCE data just released by the United States perform?
A: On Friday, September 27, the U.S. Department of Commerce released data showing that the U.S. core PCE price index rose 0.1% month-on-month in August, the lowest since May, with an expected value of 0.2% and a previous value of 0.2%; it rose 2.7% year-on-year, and the overall PCE fell to 2.2% year-on-year, the lowest level since March 2021, with an expected value of 2.3%, a drop from the previous month's value of 2.5%. Interest rate futures traders believe that the probability of a 50 basis point rate cut by the Federal Reserve in November is slightly higher than the probability of a 25 basis point rate cut, but investors are still divided on whether the Federal Reserve will take similar measures.
2.Q: What is the expected US GDP growth data?
A: Xinhua News Agency, Paris, September 25 (Xinhua) - The Organization for Economic Cooperation and Development (OECD) released its latest economic outlook report on Wednesday, saying that global gross domestic product (GDP) growth is expected to stabilize at 3.2% in 2024 and 2025, while inflation will continue to ease. According to the OECD's economic outlook, the annual growth rate of US GDP is expected to slow to 2.6% in 2024 and further to 1.6% in 2025, but monetary policy easing will play a buffering role. The final value of the US GDP seasonally adjusted quarter-on-quarter annualized rate in the second quarter was 3.0%, which was estimated at 2.9% and revised to 3%, while economic activity was supported by the recovery of real income and improved credit availability.
3.Q: What do the American people think about the economic prospects of the United States?
A: The latest report from the Conference Board stated that due to concerns about the labor market and economic outlook, the U.S. consumer confidence index fell in September, hitting the largest drop in three years. The U.S. consumer confidence index fell from 105.6 in August 2024 to 98.7 in September. This is the largest monthly drop since August 2021. The report said that the indicator measuring Americans' short-term expectations for income, business and the job market fell from 86.3 to 81.7. If the reading is below 80, it indicates that a recession may occur in the near future. Peterson, chief economist of the Conference Board, said that consumers' assessment of current business conditions has turned negative. "They are more pessimistic about the future labor market conditions and are not optimistic about the future business environment and income."
4.Q: What employment-related data will the United States release in the near future?
A: The United States will release a package of employment data intensively next week. The August job vacancy data will be announced on Tuesday night, the September ADP private employment data known as the "small non-farm" will be released on Wednesday night, and the September non-farm employment data will be released by the BLS on Friday night. It is worth noting that the strike of 33,000 Boeing machinists that has lasted for nearly two weeks since mid-September is very likely to affect related employment data and labor indicators.
5.Q: What are the expectations for these upcoming employment data?
A: Currently, Bloomberg analysts unanimously expect 125,000 new jobs, up from 99,000 in the previous month. BLS will release September non-farm payrolls data on Friday night. Currently, Bloomberg analysts expect 140,000 new non-farm jobs (up from 142,000 in the previous month), of which 120,000 new jobs in the private sector (up from 118,000 in the previous month). The unemployment rate is expected to remain the same as the previous value of 4.2%, and hourly wages will remain the same as the previous month at +0.3%. Considering that the employment sub-item of the S&P PMI index continued to weaken in September, the Conference Board Labor Difference Index fell to a 6-month low, and the impact of the 33,000 Boeing machinists' strike that has lasted for nearly two weeks since mid-September, it is expected that the new non-farm payrolls in September will continue to weaken moderately.
6.Q: What impact will the September non-farm data have on the US interest rate cut?
A: Since the September non-farm data is the last employment data released before the FOMC meeting on November 7, it will largely determine the extent of the Fed's interest rate cut in November. If the employment data is strong, the non-farm population grows significantly, and the average hourly wage growth is relatively strong, the Fed may only cut interest rates by 25 basis points in November; if the data continues to be weak, it may be interpreted by the market as a signal of economic recession, thus triggering market fluctuations and raising market expectations for a 50 basis point interest rate cut by the Fed in November.
7.Q: What is the current market forecast for the US interest rate cut?
A: CITIC Securities Research Report pointed out that from the perspective of various Taylor rule calculation methods, the current US policy interest rate level is too high, and the Fed still has a lot of room to cut interest rates next year. At the same time, some Fed officials have recently released dovish messages. Some Fed officials said that interest rates may be cut by another 50 basis points this year, and said that the policy interest rate level is too high, suggesting that there is still room for interest rate cuts next year. Overall, it is believed that the probability of another 50bps interest rate cut this year is high, and there is a possibility that the Fed will lower interest rates to below 4% next year.
8.Q: Why should we pay attention to the US election? What impact will the US election have on the economy?
A: This US election has attracted much attention because it will directly affect many key areas of the US and global economy. First of all, how to deal with inflation and debt crisis is the core issue. The Republican Party tends to reduce government spending and tighten fiscal policy, while the Democratic Party is more likely to expand social welfare and public spending. Future fiscal policies will affect market confidence and economic stability. In terms of energy policy, the Democratic Party advocates the promotion of green energy development and may further restrict the fossil fuel industry. The Republican Party may relax regulations and support the oil and gas industry. The US election will also affect Sino-US relations and trade policies. The future government's foreign policy will determine the direction of global supply chains and tariffs.
9.Q: What are the differences in the political ideologies of the two candidates with very different styles in the US election?
A: Trump and Harris represent two completely different values and political ideas. Their confrontation will also be a concentrated reflection of the contradictions and conflicts within American society. Trump's supporters are mostly white blue-collar workers who are dissatisfied with the status quo. They miss the glory of the United States in the past and long to return to the era when the "American Dream" still shines. Harris' supporters are more diverse, including a large number of ethnic minorities, women and young people. They pay more attention to social fairness and justice and hope that the United States can become a more inclusive and equal country.
10.Q: What is the latest poll situation for the US election?
A: Minnesota, South Dakota and Virginia are the first states to open early on-site voting this week, and the election campaign has officially entered a six-week sprint phase. This week's poll data shows that Harris's approval rating dropped slightly to 49.1%, but she is still ahead of Trump's 47.1%. The gap has widened to 2 percentage points, and the stalemate situation in battleground states continues. The overall support ratings of both parties have narrowed, and the 2024 presidential election is still the closest White House election in polls this century. For the Democratic Party, the overall polling and campaign funding advantages give Harris greater upside potential in the sprint stage, while economic issues and retreat policy weaknesses increase certain downside risks. Positive factors such as better-than-expected debate performance and the Federal Reserve's interest rate cut did not significantly boost the election. Considering the comparison of historical data for the same period and the error range of polls, Harris is far from a sure winner. The current slim advantage is difficult to ensure victory in the Electoral College. It is still unknown how effective the Democratic Party’s investment in performance propaganda and policy explanation will be. On the Republican side, Trump also chose to focus on economic issues as his main position, and maintained his offensive on issues such as immigration and energy to compete for swing states.
