Category Archives: Fed Flash

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.

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.

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,

Slowdown in Employment is Misleading

Payroll employment rose 173,000, which is much lower than market expectations but well in line with our forecast. The August report is notoriously underreported and then later revised up. Private sector payroll employment increased by a much more modest 140,000. The slowdown was broad-based

Consumers Go Car Shopping

Personal disposable incomes rose 0.4% after adjusting for inflation in the month of July, faster than consumer spending, which edged up 0.3% during the month. The bulk of the rebound in consumer spending, which came on the heels of a slight upward revision to June, occurred in vehicle purchases. Consumers have been reluctant to spread [...]

Growth in 2Q Revised Much Higher

The economy expanded at a revised 3.7% pace in the second quarter, almost 1.5% stronger than initial estimates for the period. The changes were driven by a strong upward revision to business investment. Commercial construction activity was particularly strong, while the contraction in equipment spending is now significantly less than initially reported.

Market Gremlins Disrupt Liftoff

Rapid declines in global equity prices, risks that the downdraft in China will take the U.S. market down again tomorrow and a legitimate concern that inflation will further decelerate are now expected to keep the Federal Reserve on the sidelines in September. A move in December is still possible, but a close call. Uber dove [...]

Fed Holds Cards Close to Vest

The Federal Open Market Committee (FOMC) minutes show that the Federal Reserve continued to edge toward liftoff, but members were not there yet last month. The divide between those on the FOMC who would like to raise rates in September and those who would prefer to wait is widening.