The Battle Against Inflation

MESSAGE FROM THE PRESIDENT

July 10, 2023

Key inflation data is scheduled for publication this week and Q2 earnings reports will emerge too. In an interview and video released this morning, Societe Generale economist Kokou Agbo-Bloua lays out the case for why he believes the U.S. economy will enter into a recession in the first quarter of 2024. He talks about how the federal government propped up GDP by 10 to 15% two years ago, and that led to excess savings and higher than normal corporate profits. It also triggered retirements and job vacancies that led to wage inflation and more. He makes the point that the lag time needed to burn off the effects of the infusion of federal dollars varies and that we are entering a time where residual effects will manifest themselves.

Many State Chamber members will report Q2 earnings shortly. It will be interesting to hear how those results are digested and what that means for the remainder of 2023 and beyond.

News You Can Use

We kick off the week with Fed Vice Chair Barr offering comments about the economy in a speech this morning. We’ll also see wholesale inventory results and consumer credit spending trends from May. Tuesday brings us the National Federation of Independent Business (NFIB) optimism index for June, while on Wednesday we’ll learn about June results for the consumer price index. June producer price index figures are out on Thursday, and we wrap up an important week on Friday with import price data and consumer sentiment numbers from June.

Q2 earnings calls get off to a slow start this week, but will come at a frenzied pace in the coming weeks. PriceSmart and WD-40 have calls today, while AngioDynamics and MillerKnoll have calls scheduled for Wednesday. PepsiCo and Delta Air Lines headline the Thursday calls and are joined by Conagra, Progressive, and Washington Federal. State Chamber members JPMorgan Chase, Citigroup, and Wells Fargo have calls on Friday, and they are joined by BlackRock, State Street, and UnitedHealth Group.

Michael J. Quaranta

President

Delaware State Chamber of Commerce

Uniquely Delaware

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