Tag Archives: federal reserve

Consumers Better but Durable Goods not So Good

Durable goods orders finally bounced back in October and rose 0.4% from September after two months of declines. Moreover, September losses are now smaller than initially reported. Gains were concentrated in defense aircraft and parts, reflecting the need to ramp up to deal with escalating tensions in the Middle East including the bombing of ISIS. [...]

Pleasant Upside Surprise for Third Quarter GDP

Real GDP in the third quarter was revised up to 3.9% from an initial estimate of 3.5%, a welcome upward surprise in growth. Moreover, most of the rise was due to positive factors, such as stronger-than-initially-estimated consumer spending and business investment. Exports were revised down, reflecting weakness abroad

There Is More to a Flat CPI than Flat Prices

The index for consumer prices (CPI) was flat in October but 1.7% higher compared to one year ago. On the surface, today’s data suggest that inflationary pressures remain contained. Prices seem to have found a bottom, which may ease some of the worries about deflationary trends that have circulated in recent months; at the very [...]

Small Decline in Industrial Production Does not Derail Recovery

Industrial production slipped by 0.1% in October, mostly because of declines in mining and utilities output. After the strong gains in September, today’s decline does not come as a complete surprise because many expected a temporary payback; it is a partial disappointment. Compared to one year ago, manufacturing output grew by a solid 3.7%, a [...]

Tipping Point for Wages

The employment cost index rose 0.7% in the third quarter, more than expected after rebounding from the doldrums in the second quarter. The index rose 2.3% from a year ago on the heels of slightly stronger wage growth; benefit costs for employers actually decelerated from a year ago.

Frightening Consumer Spending Data

Personal consumer outlays dropped 0.2% in September from August, reinforcing the negative read that the recent retail sales report provided for us. A shortfall in retail sales in September was one of the factors that triggered a selloff in the stock market earlier this month when traders feared that the U.S. consumer couldn’t play the [...]

Fed Offers Reassurance After Ending QE

The Federal Open Market Committee (FOMC) voted  today to end the large-scale asset purchase program  (also known as “quantitative easing,” or QE). FOMC members stated that they will maintain the size of the Federal Reserve’s balance sheet at the current $4.4 trillion level by replacing mortgage-backed securities and maturing Treasury bonds until the Fed starts [...]

Inflation Still Too Low

The Consumer Price Index (CPI) edged up 0.1% in September, after falling slightly the month prior. Increases in food prices tempered the drag from plummeting energy prices. This raises issues for consumers at the grocery store, as they will likely divert some of the money they are saving at the pump to deal with higher [...]

Primer for October 29 FOMC Meeting

The Federal Open Market Committee (FOMC) is slated to wrap up the large-scale asset purchase program (aka “QE3”) on October 29 with as little fanfare as possible. Federal Reserve officials believe they have prepared financial markets for this change and, despite recent market volatility, can still end the current purchase program quietly. The statement at [...]

Young Workers Looking for Work as Older Workers Are Hired

Payroll employment jumped 248,000 in September. The three-month moving average suggests payroll gains of 220,000 per month, which is in line with gains over the last year. Today’s data validate our view that the initial weak report for August was an anomaly.