Tag Archives: federal reserve

Construction and Manufacturing Surprise to Upside

Construction spending jumped 1.8% in July from June, much more than most expected. Gains were greater in the public sector than in the private sector, as highway and street construction picked up to some extent in response to an unusual volume of repairs that needed to be completed in response to last year’s harsh winter. [...]

Spending and Incomes Flatline in July

Real disposable incomes increased by 0.1% in July after being revised up for the month of June.  The most weakness occurred in wages and salaries. Rental incomes increased, which is keeping investors in the housing market, particularly in the Midwest where foreclosures are still around for investors to flip to rent. Real expenditures were slightly [...]

GDP Q2 Revised to Upside

Real GDP was revised up 0.2% to 4.2% in the second quarter, a pleasant surprise as many had expected a downward revision. Increases were across the board but overall gains were still heavily dependent on a rise in inventories following a sharp drain

Global Economy: Five Themes of the Week

Europeans like myself traditionally spend the third week of August vacationing at the beach. Even here in Chicago, one week ahead of the reopening of schools, the atmosphere has been decidedly relaxed. For those of us on the economic desk, though, the past few days were not without interesting developments: •    Monetary policy became much [...]

CPI Treads Water in July

The Consumer Price Index (CPI) edged up 0.1% in July from June, with widespread declines in energy prices offsetting a larger-than-expected uptick in food prices. Grocers and restaurants raised prices, attempting to tap into the discretionary spending that lower prices at the pump will hopefully bring. So far, however, increases in food prices have proven [...]

Retail Sales Flatline in July

Retail sales disappointed again in July, flatlining after rising only 0.2% in June. Declines were in everything from big-ticket durable goods such as vehicles (some of that could be because of the shift from more expensive trucks into less expensive cars), furniture and appliances to the big-box retailers. Even the large discount chains were hit. [...]

Employment Data Affirm Fed Strategy of Gradualism

Payroll employment rose a less-than-expected 209,000 in the month of July, with modest upward revisions for a net 15,000 additional jobs in the previous two months. This is the sixth month that we have seen job gains exceed the 200,000 threshold, but just barely. Indeed, private sector job creation fell slightly below the 200,000 level, [...]

Growth Rebounds

Real GDP growth rose a more-than-expected 4% in the second quarter, after falling a less-than-previously reported 2.1% in the first quarter. The forecast was for a 3% rebound in growth. Benchmark revisions, which include more complete data, helped to reduce the drop in the first quarter. Almost all of the “unexpected rise” in growth in [...]

Inflation Increases at the Gas Pump

The Consumer Price Index (CPI) rose 0.3% in June, after rising 0.4% in May. Almost all of the increase (2/3) was driven by a sharp (3.3%) jump in prices at the gas pump. Food prices decelerated in June, after increases in previous months; prices at the grocery store were flat after some increase in recent [...]

Yellen Defends Gradualism

Federal Reserve Chair Janet Yellen has been succinct in her testimony to the Senate Banking Committee today. She emphasized that weakness in the first quarter was likely transitory, but still worse than anyone expected.  The Fed needs to be mindful on how much it can write off to weather problems. She also cited ongoing problems [...]