• August employment data confirmed the labour market has cooled much more than the Fed had earlier expected.
• While the FOMC looks set to start cautiously with 25bp next week, we continue to expect 100bps of cuts this year.
• We have revised up our GDP growth forecasts –we expect growth of 2.6% (previously 2.5%) for 2024 and 1.7% (was 1.5%) for 2025. This is in part due to the strength of consumption through to July. However, consumption has outpaced income and we still expect it to moderate and for the economy to slow.
• Monthly core CPI inflation was a bit higher in August but this was not replicated in other measures of underlying inflation. Core PCE inflation for the month is likely to be lower than the CPI and in line with recent modest prints.

Find out more in NAB’s US Economic Update – September 2024