Get ready for the biggest month of US economic data in years
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But that was just a sideshow.
On Friday, one of the biggest stretches of US economic data in recent memory will really get underway with the report of the employment cost index.
What is the employment cost index? It's a measure of wages that factors in not just money paid to employees, but employer costs for employee benefits. In short, it gives you a fuller idea of how people are being compensated for their work.
On April 30, the first quarter ECI number showed a clear uptick in wages, as the index grew 0.6% over the prior quarter and 2.6% over the prior year to start 2015.
Average hourly wages, meanwhile, were up 2% over the prior year in June and have been generally lackluster over the last several years.
FRED
But many in the market are eyeing the Fed's September meeting for the central bank's first rate hike in 9 years.
For this to happen, however, we're going to need to see signs of wage growth and continued improvement in the labor market over the next month.
In its policy statement on Wednesday, the Fed said it expects it will raise rates, "when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term."
On the inflation front, the Fed got reasonably encouraging news on Thursday as the first estimate of second quarter GDP showed "core" PCE, a measure of inflation that strips out the more volatile cost of food and gas, rose 1.8% in the second quarter.
This is still below the Fed's 2% target, but there seems potential that the Fed could become confident inflation will return to its target over the "medium term."
FRED
After Friday's ECI report, we'll get the July jobs report in a week and then, on September 4, the August jobs report.
In a note on Wednesday, Citi's Steve Englander said that if these upcoming jobs reports show nonfarm payrolls grow by at least 210,000 - with the unemployment rate correspondingly dropping further - the Fed will likely have reason to raise rates.
And so this upcoming stretch is simply as big as it gets.
Via Morgan Stanley, here's a brief calendar to keep handy as we head into a run of data that will define whether the coming weeks really are the end of the Fed's post-crisis era of zero interest rates, or whether the September meeting comes and go with the Fed yet again doing nothing.
Morgan Stanley
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