Author Archives: Diane Swonk

Growth Rebounds

Real GDP growth rose a more-than-expected 4% in the second quarter, after falling a less-than-previously reported 2.1% in the first quarter. The forecast was for a 3% rebound in growth. Benchmark revisions, which include more complete data, helped to reduce the drop in the first quarter. Almost all of the “unexpected rise” in growth in [...]

Durable Goods Orders Rebound Partway

Durable goods orders jumped 0.7% in June on strong gains in machinery and transportation equipment. The increase in transportation equipment was heavily concentrated in defense aircraft and parts, which has long lag times, while orders in the vehicle sector actually fell. The more important capital goods orders excluding defense and aircraft, which track actual business [...]

New Home Sales Disappoint

New home sales dropped to a 406,000 rate in June and were revised down for the month of May. The biggest losses were in the South, where builders have complained about labor shortages. A shortfall in the South also has a disproportionate effect on the overall figures

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

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 [...]

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 [...]

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 [...]

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 [...]

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,

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.