Weak economic data has increased the likelihood that the Federal Reserve will forgo a rate hike at its September meeting, causing consumer companies to experience a rise in their stock prices.
The ADP National Employment Report revealed that private payrolls only saw an increase of 177,000 in August, which fell short of analysts’ expectations. Additionally, wage growth has slowed down to its most modest rate in two years.
This ongoing pause in rate hikes may bring some relief to the U.S. housing market, as property-market activity has slowed down significantly due to a sharp increase in 30-year mortgage rates, reaching above 7%.
Although there has been a slight uptick in pending home sales of 0.9% in July compared to the previous month, experts warn that contract signings are still far from reaching pre-pandemic levels. Jeffrey Roach, a chief economist at brokerage LPL Financial, cautions that residential investment is unlikely to contribute to economic growth in the latter half of 2023.
In other news, Tennessee distillery Brown Forman experienced a decline in their stock prices after reporting lower-than-projected fiscal first-quarter profit and sales for the Jack Daniel’s maker.
Overall, the uncertain future of rate hikes has left its mark on various sectors of the economy, particularly consumer companies and the housing market.