Author Archives: Diane Swonk

Real GDP Holds Strong

Real GDP rose 3.5% in the third quarter after rebounding at a 4.6% pace in the second quarter. We have been trying to regain ground lost to unusually harsh winter weather in the first quarter of the year when real GDP declined by 2.1%. Most components of real GDP decelerated after the catch-up we saw [...]

Fed Offers Reassurance After Ending QE

The Federal Open Market Committee (FOMC) voted  today to end the large-scale asset purchase program  (also known as “quantitative easing,” or QE). FOMC members stated that they will maintain the size of the Federal Reserve’s balance sheet at the current $4.4 trillion level by replacing mortgage-backed securities and maturing Treasury bonds until the Fed starts [...]

Durable Goods Orders Disappoint

Durable goods orders fell 1.3% in September, well below expectations. Orders were also revised down slightly for the month of August. The decline in new orders was fairly broad-based, with the exception of metals, electronics and appliances. It is important to note, however, that the drop in orders followed a jump two months ago in [...]

New Home Sales Flatline

New home sales rose an almost imperceptible 0.2% in September, after being revised down sharply for the month of August. While new home sales are a notoriously volatile data series, estimated from a very small sample and subject to large revisions, sales have continued to trend modestly higher

Inflation Still Too Low

The Consumer Price Index (CPI) edged up 0.1% in September, after falling slightly the month prior. Increases in food prices tempered the drag from plummeting energy prices. This raises issues for consumers at the grocery store, as they will likely divert some of the money they are saving at the pump to deal with higher [...]

Primer for October 29 FOMC Meeting

The Federal Open Market Committee (FOMC) is slated to wrap up the large-scale asset purchase program (aka “QE3”) on October 29 with as little fanfare as possible. Federal Reserve officials believe they have prepared financial markets for this change and, despite recent market volatility, can still end the current purchase program quietly. The statement at [...]

Home Sales Edge Higher

Existing home sales edged higher in September after losing ground in August. We are still trying to regain ground lost, however, in the wake of last year’s “taper tantrum” over Federal Reserve talk of ending its asset purchasing program; that pulled a lot of sales into the third quarter of 2013. Hence, sales remain below the [...]

Housing Starts Recross Million Mark

Housing starts moved back above the one million unit threshold again in September, after being revised up slightly for August. Multifamily starts accounted for nearly the entire comeback after starts cratered in August.

Industrial Production Surges

Industrial production surged 1.0% in September, more than double market expectations, despite a small downward revision to August. Moreover, gains were fairly broad-based with the exception of the auto industry, which took a breather but is expected to pick up again later in the year. Electronics also took a hit,

Retail Sales Disappoint

Total retail sales slipped 0.3% in September after surging in August. A drop in vehicle sales from a post-recession high was one reason for the weakness. Core retail sales, which exclude the volatile vehicle and gasoline components, also dipped slightly during the month. That was despite a sharp drop in prices at the pump and [...]