Category Archives: Diane Swonk

Employment Numbers Disappoint

Payroll employment rose a tepid 142,000 in September, which surprised on the downside along with the revisions; both July and August were revised down instead of up. The downward revision to August was especially worrisome

A Primer on Employment

We are looking for non-farm payrolls to come in at 220,000 with upward revisions to August, which is a notoriously volatile month. Private payrolls are expected to increase by 215,000 with strong gains once again in health care.

Manufacturing Weak but Construction Is on the Mend

The ISM index of manufacturing activity slowed to 50.2 in September, which suggests that overall manufacturing activity is still expanding but only slightly.

Spending on Services Picks up

Personal consumer expenditures rose 0.4%, after adjusting for inflation in August; that was slightly faster than we saw in July and slightly above the inflation-adjusted rise in incomes for the month. Consumer spending on big-ticket durable goods such as vehicles remained buoyant, while gains in the service sector picked up some momentum.

GDP Data Put Yellen on Solid Footing

Real GDP was revised up to a 3.9% pace in the second quarter, 0.2% higher than previously reported. Average growth in the first half of 2015 is now tracking at 2.3%, well above the economy’s potential.

Orders Moderate for Durable Goods

Durable goods orders fell 2% in August, well in line with expectations after two months of strong gains. Both aircraft and vehicle orders accounted for the decline. Transportation equipment had been a driver of gains earlier this summer. Core capital goods orders (excluding aircraft and defense) also retreated a bit after two robust months. Core [...]

FOMC Hedges Downside Risks

The Federal Open Market Committee (FOMC) delayed liftoff today in response to concerns about growth abroad (read: China) and the likelihood that inflation will move lower before it moves higher. The central tendency of members in the meeting revealed their actual concerns (which provide the rationale for their decisions) that growth and inflation could both [...]

Inflation Still Tepid

The Consumer Price Index (CPI) fell 0.1% in August on plummeting prices for airfares and at the gas pump. The month-to-month drop might have been even greater had the Midwest and Los Angeles not experienced refinery problems,

Implications of a Rate Hike for Consumers

The real issue when the Federal Reserve raises interest rates for the first time is not as much an issue of magnitude for consumers. The intended first rate hike will be small in size; it will not represent a do-or-die scenario for consumers. The Fed’s own estimates suggest that the first increase could easily come [...]

Industrial Production Drops

Industrial production fell a larger-than-expected 0.4% in August after a strong upward revision to July. The volatility in the number was caused by changes in vehicle production, which have proven difficult to capture on a seasonally adjusted basis. Plants that were previously shuttered during July were up and running; that is borrowing from the usual [...]