economy
The stakes for next week's inflation data just got higher. Here's what's ahead
Friday's jobs report for July complicated the monetary policy outlook.
TL;DR
- Stocks rallied Friday after the July jobs report showed a surprising loss of 23,000 nonfarm payrolls.
- The unemployment rate fell to 4.1% in July.
- Investors interpreted the weak jobs report as a sign the Federal Reserve will not hike rates in September.
- The odds of a Fed rate hike in September fell to 42% from 55%.
- Upcoming July CPI and PPI data are now crucial for assessing inflation and the Fed's next move.
- Economists expect July CPI to rise 3.4% year-over-year, still above the Fed's 2% target.
- A hot inflation report could lead to stagflation, forcing the Fed to raise rates while the economy weakens.
- Easing U.S.-Iran hostilities could lead to lower oil prices, potentially easing inflation pressures.
- Some analysts believe the S&P 500 could reach 8,000 if inflation cools.
- The market shows exuberance, with major averages achieving their best week since April.
- The Nasdaq Composite ended the week up over 5%.