Author Archives: Diane Swonk
The Federal Open Market Committee (FOMC) erred on the side of caution by keeping the phrase “considerable time” in the statement, but not using it to describe policy moves going forward. Instead, members said they would be “patient” in raising rates. The change in verbiage is a bit of a bait-and-switch as the FOMC preps [...]
The Consumer Price Index (CPI) fell 0.3% in November, pushed down by the largest drop in prices at the pump since the height of the financial crisis in December of 2008. The CPI rose a negligible 1.3% from a year ago, once again driven down by low gas prices. Food prices rose 0.2% during the [...]
Industrial production rebounded 1.3% in the month of November and was revised up for the month of October, when weakness in the mining and utilities sector took a toll on overall gains. Upward revisions were made back to June, which helps explain some of the buildup in inventories that we saw in the third quarter. [...]
Retail sales surged 0.7% in November and were revised up for the month of October, which has become an important indicator for the holiday shopping season.
Payroll employment jumped 321,000 in November and was revised up by 44,000 for the previous two months, bringing the last three-month average up to 278,000. Gains were broad-based, with particularly good gains in the business services sector (outside of temporary hires) where full-time, high paying jobs reside. This sector was among those hardest hit by [...]
Construction spending surged 1.1% in October, more than twice the consensus, while losses for September came in much smaller than initially reported. The largest increase was in the public sector, which had weighed down construction figures earlier in the year. In that sector, the largest gains were in health care and public safety. Highway construction [...]
We expect payroll employment to rise by 205,000 in November, slightly less than the 222,000 average monthly gain for the 12 months leading up to October. Private payroll employment is expected to drop below the 200,000 threshold to 195,000 for the month.
The Purchasing Managers Index (PMI) flash manufacturing index slowed in November with a worrisome shortfall in both new orders and actual manufacturing activity. The Institute for Supply Management (ISM) index for manufacturing activity, however, held up somewhat better with gains in new orders and production offsetting some moderation in hiring.
Durable goods orders finally bounced back in October and rose 0.4% from September after two months of declines. Moreover, September losses are now smaller than initially reported. Gains were concentrated in defense aircraft and parts, reflecting the need to ramp up to deal with escalating tensions in the Middle East including the bombing of ISIS. [...]
Real GDP in the third quarter was revised up to 3.9% from an initial estimate of 3.5%, a welcome upward surprise in growth. Moreover, most of the rise was due to positive factors, such as stronger-than-initially-estimated consumer spending and business investment. Exports were revised down, reflecting weakness abroad