Tag Archives: federal reserve
The Consumer Price Index (CPI) flatlined in November as a drop in energy prices offset price increases in the service sector. The rise in prices was in non-medical services; both medical services and prescription drug costs continued to moderate in November, which reflects what appears to be a more systemic trend in medical costs.
The Producer Price Index (PPI) dropped 0.1% in November from October, mostly because of a 0.4% drop in energy prices. Gasoline prices plummeted 0.7% alone. Food prices were flat, while the core PPI (prices excluding food and energy) rose a tepid 0.1%. The increase in the core was attributable to higher vehicle prices
Personal disposable incomes dropped 0.2% both before and after adjusting for inflation in October. That was despite the end of government furloughs, which took place in July and August. Moreover, government workers who were forced to work without pay or were sent home during the government shutdown were paid retroactively.
Payroll employment jumped 203,000 in November, a stronger number than markets expected, with some modest upward revisions to the last two months. More importantly, the composition of job gains was much better than it had been, with strong gains in manufacturing and construction. Leisure and hospitality, which had dominated gains in recent months, moderated considerably. [...]
Existing home sales dropped a more than-expected 3.2% to a 5.12 million unit annualized rate, the lowest level since June and the wrong direction for the Federal Reserve. The decline in sales was widespread across regions, but greatest in the West where inventory shortages are the most acute. There has also been a related increase [...]
In remarks to a group of business economists (the National Association for Business Economics, or NABE), Federal Reserve Chairman Ben Bernanke argues that forward guidance is more effective than asset purchases in stimulating growth. He explicitly extends forward guidance by including increases in hiring,
Janet Yellen, the nominee for Federal Reserve Chair, steadfastly defended current monetary policy and her belief in the need for further accommodation during the Senate confirmation hearing. This week, we expect to get some clarity on what form that additional stimulus will take. The most important speech to watch is Tuesday night, when Federal Reserve [...]
Europe: Surprise rate cut to preempt deflation & support fragile economic turnaround To the surprise of many, the European Central Bank (ECB) decided today to cut in half its key, short-term interest rate to 0.25% from 0.5%. While the option to reduce rates further was on the table, the lack of adequate “signaling” ahead of [...]
Industrial production rose 0.6% in September, at the high end of the consensus for the month. Large gains in vehicle production helped to offset declines in everything related to housing (furniture, appliances, home electronics and carpeting). Production of nondurable goods actually declined, which left overall manufacturing activity increasing at a tepid 0.1% pace
The Federal Open Market Committee (FOMC) is widely expected to stand pat in its decision to continue large-scale asset purchases at an $85 billion-per-month pace at the meeting this week. Moreover, we have changed our forecast and now expect weakening growth going into the fourth quarter, added to the damage from the government shutdown and [...]