Category Archives: Diane Swonk
Consumer Confidence Jumps with Asset Prices, Cheaper Gas
Consumer sentiment jumped to 83.7 in May, the highest level since July 2007. A pickup in net worth via the stock market, home values and falling prices at the pump all helped fuel the gains. Consumers’ assessments of their personal finances jumped to 97.5, the highest level since late 2007. The gains, however, were concentrated [...]
Question I received on inflation this morning:
There are multiple inflation measures, the most used and least accurate of which is the Consumer Price Index (CPI). The CPI is measured from a fixed basket of goods; prices are adjusted for quality improvements where possible. Historically, the overall index has converged to the core index, so excluding food and energy prices is important [...]
Housing Disappoints and Inflation Moderates
Today’s data confirm a picture of moderation in growth this spring. Housing starts were significantly lower than expected in April at an annualized rate of 853,000, while the data for March was revised down. The largest drop was in multi-family units, which plummeted 142,000 units over the month, with declines heavily concentrated in the South.
Industrial Production Falls with Decline in Heating Demand
Industrial production fell 0.5% in April after increasing 0.3% in March. Most of the weakness showed up in a 3.7% monthly drop in utilities. Heat, in particular, didn’t need to be turned on as much, once spring arrived a month late. That said, losses were widespread with the only notable gains in mining. Production of [...]
Producer Prices Continued to Drop on Food and Energy
Producer prices plummeted 0.7% in April, after falling at almost the same pace in March. Declines were largest in food and energy, as prices excluding those two components eked out a modest 0.1% increase and continued to moderate from the pace in previous months. The only major increase in the index for finished goods in [...]
Retail Sales Surprise to Upside
Retail sales squeaked out a modest increase of 0.1% in April, foiling expectations for a decline. Moreover, the biggest decline in the data was in gasoline station sales, where prices were falling. That freed up cash for consumers to spend elsewhere. Core retail sales, which exclude autos and gasoline, were up 0.6%, compounded by upward [...]
Employment Surprise to the Upside; Unemployment Rate at 5-Year Low
Payroll employment rose by 165,000 in April, a slight upside surprise. More importantly, data for February and March were revised up significantly, providing some reassurance that the economy will be resilient if not robust in the second quarter.
Fed Keeps the Pedal to the Metal
The Federal Open Market Committee (FOMC) decided during its meeting today to keep monetary policy accommodative. Short-term interest rates will remain near zero until the unemployment rate drops below the 6.5% threshold and/ or inflation rises 0.5% above the Fed’s 2% medium-term target. Voting members of the FOMC also decided to continue the pace of [...]
Construction Spending and Manufacturing Weak
Construction spending plummeted 1.7% in March, and was revised down for January and February. This suggests downward revisions to first quarter growth, which also disappointed. The largest declines were in the public sector, driven by declines at the Federal level where cuts have been the deepest. Declines were broad-based and covered every category with the [...]
ADP Jobs Numbers Disappoint
The ADP report on payroll employment rose a disappointing 119,000 in April while the total for the month of March was revised down. Small firm employment was much weaker than in the past, likely in response to persistently bad weather in April. Many lawn care companies complain that they haven’t been able to work a [...]
Bloomberg asks Diane Swonk to explain Fed concern over unemployment
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