Tag Archives: federal reserve

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.

Manufacturing Stays Strong for September

The Purchasing Managers’ Index (PMI) flash reading held steady at 57.9 in September, marking the end of the strongest quarter since the survey began in 2007. Employment was particularly strong in this month’s report, which will help to provide an offset to the weakness we saw in August. An improvement in both domestic economic conditions [...]

Investor Interest in Housing Wanes

Existing homes sales slid to a 5.05 million unit pace in August and were revised down slightly to a 5.14 million unit rate in the month of July. Losses were concentrated in the West and South, where investors had been playing an outsized role in supporting sales. All cash buyers slipped to 23% of the [...]

Housing Starts Dip

Housing starts fell below the one million unit threshold again in August, but were revised up slightly for the month of July. Losses were heavily concentrated in the multifamily market, which has been on a tear. The largest losses in multifamily home construction were experienced in the West, where housing shortages are the most acute. [...]

Fed on Path to Slow Exit from QE

The Federal Open Market Committee (FOMC) voted to further reduce its asset purchases by $5 billion each, which brings its current purchases of mortgage-backed securities down to $5 billion per month and its purchases of Treasury bonds down to $10 billion per month. Chair Yellen also went out of her way to reemphasize that the [...]