Author Archives: Diane Swonk

Consumers Deliver for Halloween

Retail sales rose 0.3% in October, slightly more than expected. U.S. consumers are spending some of the increased income that they are gaining from recent job growth, increased working hours and lower prices at the pump. Indeed, core retail sales, which exclude vehicle and gasoline sales, jumped 0.6% during the month with broad-based gains in [...]

Falling Oil Pushes Down Import Prices

Imports fell 1.3%, due mostly due to a sharp downdraft in energy prices. Energy prices alone fell 6.9% during the month. More worrisome is that import prices excluding oil were also down slightly and have been falling for several months. That reflects the disinflationary effect that a strong dollar is beginning to have on import [...]

Jobs Data Better than Headline Suggests

Payroll employment increased 214,000 in October with upward revisions for the previous months of 31,000. Moreover, we have seen upward revisions consistently, which means momentum is moving to the upside. Some of the largest gains occurred in low-wage food services and drinking establishments. Some of that increase in employment reflects a move by employers to [...]

Trade Deficit Widens

The trade deficit widened from $40 billion in August to $43 billion in September. Imports were essentially unchanged while exports declined slightly. Exports of industrial materials and supplies, which include telecommunications equipment and capital goods, were particularly weak.

Construction Disappoints, Manufacturing Improves

Construction spending dropped 0.4% in September, after falling a revised 0.5% in August. The weakness in August was less than initially reported but the data were still a disappointment. Losses were concentrated in public sector construction. The private sector also saw some weakness, however, particularly in nonresidential construction. Gains in lodging, food, drinking establishments and [...]

Tipping Point for Wages

The employment cost index rose 0.7% in the third quarter, more than expected after rebounding from the doldrums in the second quarter. The index rose 2.3% from a year ago on the heels of slightly stronger wage growth; benefit costs for employers actually decelerated from a year ago.

Frightening Consumer Spending Data

Personal consumer outlays dropped 0.2% in September from August, reinforcing the negative read that the recent retail sales report provided for us. A shortfall in retail sales in September was one of the factors that triggered a selloff in the stock market earlier this month when traders feared that the U.S. consumer couldn’t play the [...]

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 [...]