Category Archives: Diane Swonk

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.

Aircraft Orders Lift Durable Goods

Durable goods orders jumped a more-than-expected 3% in October, buoyed by a surge in aircraft orders for Boeing at the Dubai air show. Moreover, orders were revised up for the month of September. Nondefense and ex-aircraft orders, which more closely correlate with direct business investment, increased

Inventories Still a Problem

Real GDP was revised up to 2.1% in the third quarter from an initial estimate of 1.5%. Unfortunately, almost all of those “gains” can be attributed to larger-than-previously reported inventories, which will now have to be drained in the fourth quarter. This could further deepen holiday discounts

Fed Ready to Raise Rates: Decision not Unanimous

The minutes to the Federal Open Market Committee (FOMC)’s October meeting revealed the ongoing debate over the timing of the first rate hike and concerns about communications. The majority of members was either ready to move or believed that they would be able to move in December. There was significant pushback by two members

Listen for Dissonance or Harmony from the Fed

The key question when the minutes of the Federal Reserve’s October meeting are released today will be how far Chair Janet Yellen’s legendary gift of persuasion worked, particularly within her inner circle.

Industrial Production Better than Headline

Industrial production dropped a more-than-expected 0.2% in October. All of that weakness, however, can be attributed to sharp declines in utilities and mining. Milder-than-usual autumn weather pushed down utilities, while mining and extraction continued to suffer from low prices at the gas pump.

Inflation Offers Fed Confidence

The Consumer Price Index (CPI) rose 0.2% in October compared to one month ago and one year ago. Core (nonfood and nonenergy) inflation also rose 0.2% as the drag from energy prices abated and the push from medical care services intensified.

Producer Prices Drop

Producer prices unexpectedly fell 0.4% in October as services inflation fell well short of expectations for the second straight month. Another sharp drop in inflation in the services sector,

Retail Sales Better than Headline Indicates

Retail sales rose what appeared to be a tepid 0.1% in October but, as the debates have revealed, appearances can often be deceiving. Vehicle sales remained unusually strong after an already robust September, which dampened month-to-month gains, while gasoline station sales continued to fall on lower prices at the pump. Core retail sales, which exclude [...]

Catch-up in October Employment Seals the Deal

Payroll employment surged by 271,000 in October, reversing the weakness we saw over the summer. Moreover, gains were broad-based in everything from professional services, which include entry-level workers, to construction, retail, food services and hospitals.