Category Archives: Diane Swonk

Consumers Power Ahead; Businesses Disappoint

Consumers jumped on discounts and credit to leverage their incomes in November, with spending slightly outpacing solid, inflation-adjusted, disposable income gains during the month. Spending on big-ticket vehicles and holiday gifts both bounced back

The First Step

Federal Reserve Chair Janet Yellen successfully corralled the cats, achieving a unanimous vote by the Federal Open Market Committee (FOMC) to lift the fed funds rate by one quarter point to a range between 0.25% to 0.50%. The unanimous vote came with a compromise. The FOMC reinstated a form of forward guidance, stating that the [...]

Mild Weather Takes Toll on Production

Industrial production slipped another 0.6% in November with unusually mild winter weather adding to the toll the manufacturing sector has already been experiencing in the face of a strong dollar and an overhang of inventories. Production at utilities plants plummeted

Housing Starts Post Solid Gains

Housing starts jumped at a double-digit rate to a 1.17 million-unit, annualized rate in November following slight upward revisions to October. Gains occurred in both the multifamily and single-family

CPI Firms Year-on-Year

The Consumer Price Index (CPI) flattened out the during the last two months as falling prices at the gas pump pulled down the overall index once again. However, we are finally starting to see some firming on a year-over-year basis with the CPI edging up 0.5% from a year ago. The reason is that we [...]

Yellen’s Big Test

Yet another round of market jitters, triggered by plummeting oil prices (OPEC has lost control of the oil market) and related problems in the high-yield bond market have raised questions about whether the Federal Reserve will actually pull the trigger and finally lift short-term interest rates from the zero bound. The moves we saw overnight [...]

Employment Gains Cinch Liftoff

Payroll employment jumped 211,000 in November and was revised up significantly for October and September. Gains were broad-based. The only major exceptions were mining, which continues to be hammered by low oil prices, and manufacturing, hit by the strong dollar and overhang of inventories. The good news is that the economy is more than absorbing [...]

Employment Data Forecast for November

Payroll employment is expected to rise by 185,000 in November after surging a surprising 271,000 in October. That would bring trend job creation close to a 200,000 norm. Private employment is expected to increase by 180,000,

Manufacturing Falters, Construction Improves

The Institute for Supply Management (ISM) index dropped to 48.6% in November, affirming other evidence that the manufacturing sector is now in a contraction. Losses were fairly broad-based with the exception of employment, which moved back above the 50% threshold in November.

Consumers Make Trade-offs

Real disposable incomes rose 0.4% in October, slightly faster than September, while inflation-adjusted spending rose a tepid 0.1% during the month, weaker than September, which was actually revised down. The saving rate picked up, but something more than caution alone appears to be happening.