Home Sales Rise – Still not Enough


Existing home sales finally showed some signs of life in June, crossing the five million unit mark for the first time since last October. Sales for May were also revised up a bit. We still have a long way to go, however, before matching the highs hit last summer Read More »

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Inflation Increases at the Gas Pump


The Consumer Price Index (CPI) rose 0.3% in June, after rising 0.4% in May. Almost all of the increase (2/3) was driven by a sharp (3.3%) jump in prices at the gas pump. Food prices decelerated in June, after increases in previous months; prices at the grocery store were flat after some increase in recent months. Inflation outside of the volatile food and energy categories decelerated Read More »

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Housing Starts Fall Again


Housing starts dropped back below the one-million unit mark to 893,000 in June, while starts for May were revised down. Losses were posted in both single- and multifamily starts. Single-family starts were at the lowest pace in more than a year; that is particularly disappointing given that the bulk of the economic momentum from housing for the job market comes from single-family construction. There are also more spillover effects from spending on single-family units Read More »

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Tepid Production and Mortgage Figures Reinforce Gradualism


Industrial production rose 0.2% in June and was revised down slightly for the month prior. The bulk of the weakness occurred in consumer goods, which had been extremely strong earlier in the quarter. Hopefully, this weakness is transitory as the auto sector and big-ticket consumer goods are expected to provide a tailwind for the economy in the second half of the year. The pent-up demand for big-ticket durables, in particular, accelerated last winter Read More »

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Yellen Defends Gradualism


Federal Reserve Chair Janet Yellen has been succinct in her testimony to the Senate Banking Committee today. She emphasized that weakness in the first quarter was likely transitory, but still worse than anyone expected.  The Fed needs to be mindful on how much it can write off to weather problems. She also cited ongoing problems in the housing market. Read More »

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Retail Sales Better then Headline Suggests


Retail sales rose a tepid 0.2% in June, but were revised up for the month of May. That is the second month in a row that sales were revised up; it means we are behind the curve on a much-needed catch-up in consumer spending following the winter doldrums. Vehicle sales tumbled, Read More »

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Employment Explodes for July 4th Holiday


Payroll employment jumped by 288,000 in the month of June, with upward revisions to both May and April. April now shows a rise of more than 300,000 as the economy continued to snap back from the winter doldrums. Read More »

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Yellen Provides Road Map to Fight Bubbles


Federal Reserve Chair Janet Yellen shot a warning across the bow of financial markets today by laying out just how aggressive the Fed is willing to get in order to stem potential bubbles. She stressed the use of macroprudential, or regulatory policies, over direct changes in monetary policy to ensure financial market stability but did not rule out changes in monetary policy if financial conditions destabilize enough. Read More »

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Fed Stays the Course but Shows Divisions on Exit Strategy


As expected, the FOMC voted to stay the course and continue its gradual tapering of asset purchases today, with a reduction of $5 billion in purchases of mortgage-backed securities to $15 billion per month and a $5 billion in Treasury bond purchases to $20 billion in July. The Fed marked down its forecast for the year, Read More »

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Inflation up, Housing down


The Consumer Price Index (CPI) rose 0.4% in May, the largest increase since early 2013. The rise in food prices on the heels of a harsh winter, disruptions to the planting season and drought in the West pushed up the price of food at home by 0.7%, which was no surprise to anyone shopping at a grocery store in May. We also saw gains in prices across a broad spectrum of categories including airline fares Read More »

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