Category Archives: Fed Flash

CPI Rebounds from Winter Lull

The Consumer Price Index (CPI) rose  0.2% in March from February, well in-line with expectations and was up 1.5% from a year ago, a little hotter than we saw just a month ago. The portions of the country that escaped the polar vortex suffered a drought, which is pushing up feed prices. In response, prices [...]

Private Sector Recovers Job Numbers, not Quality

Payroll employment jumped 192,000 in March and was revised up by 37,000 for the previous two months; that puts the total number about where we expected it. Private sector employment crossed its previous peak. The quality of jobs generated, however, is not comparable in any way to those we lost. The overwhelming majority of job [...]

Yellen Stays Course; Fed Remains Dovish

The Federal Open Market Committee (FOMC) voted today to continue to taper the pace of asset purchases by $10 billion (split evenly between Treasury bonds, which are now being bought at a $30 billion per month pace, and mortgage-backed securities, which are being bought at a $25 billion per month pace.)  That vote was unanimous. [...]

Polar Vortex Fails to Derail Spring Hiring

Payroll employment rose 175,000 in February, with a little more than a third of the gains in business services, including temporary hires. The weather imprint was also evident in the composition of employment gains, with the leisure and hospitality sector adding jobs because those of us who could, migrated to ski resorts and sunny destinations,

FOMC Policy Options, Voting Tactics for 2014

The voting members of the Federal Open Market Committee (FOMC) changed to the following in January: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Richard W. Fisher; Narayana Kocherlakota; Sandra Pianalto; Charles I. Plosser; Jerome H. Powell; Jeremy C. Stein; Daniel K. Tarullo and Janet L. Yellen. Ben Bernanke is off now. Stanley Fischer, [...]

A Ray of Light Amidst Clouds in the Labor Market

Nonfarm payrolls edged up a tepid 113,000 in January, after rising only 75,000 in December. Revisions to both October and November, however, were substantial, which suggests we had a cushion on employment, as the winter doldrums set in. The week that the survey was taken was the mildest weather-wise for the month, which probably accounted [...]

2013 Growth Held Back by Fiscal Policy

Real GDP growth came in at 3.2% in the fourth quarter of 2013, a little less than we expected.  One reason was that spending by the federal government plummeted further in response to the government shutdown and budget battles; those losses will be much more muted as we move forward, now that we have an [...]

A Fond Farewell for Ben

As we expected, the Federal Open Market Committee (FOMC) voted to reduce the pace of large-scale asset purchases by $10 billion per month, spread evenly between Treasury bonds and mortgage-backed securities (MBS), while it pledged to continue to keep short-term interest rates near zero until well after the unemployment rate falls below the 6.5% threshold, [...]

Energy & Shelter Prices Up

The Consumer Price Index rose 0.3% in December, boosted by higher prices at the pump and higher heating oil prices. The cost of shelter was also large and in response to escalating rents but that can’t be sustained. Rents are now much higher than the marginal costs of home ownership,

Weather Puts Chill on Employment Report

Nonfarm payrolls rose a dismal 74,000 in December, well short of market expectations. Unusually cold winter weather contributed to the weakness. A whopping 1.7 million workers were forced to accept part-time instead of full-time work because of weather conditions alone; 273,000 people with jobs couldn’t work because of the severe weather.