QUICK QUILL — In a sign of stress, consumers are buying less food. Home builder pessimism and waning wage pressures also point to disinflation as do the Philly Fed future cost and price metrics. All told, this adds to the run of data that should price out future hikes. Though sure to be lost on Fed officials blinded by politics, downside surprises in either today’s import prices or consumer expectations would bolster the rate rally camp. (Are you ready for some FOMC blackout?)
TAKEAWAYS
- When deflated using CPI Food at Home, real food and beverage sales fell 0.4% MoM in June, bringing the YoY pace to -1.6%, a 10th straight month in the red; meanwhile, real food services sales rose just 0.4% YoY, continuing a streak below the 2.7% long-run average since October
- NAHB Home Builder Sentiment fell to 34 in July, just three points above the December 2022 cycle low; the use of sales incentives by builders has been north of 60% for 16 months, and weak builder sentiment validates continued easing in Goldman Sachs’ Wage Growth Tracker
- Philly Fed Future Prices Paid have fallen from November 2025’s local high of 74.5 to their current 56.7, while Future Prices Received are down from May’s high of 67.2 to 41.4; the declines in both series echo the NY Fed’s evidence of peak costs and pricing having passed