Tag Archives: inflation

Consumers Power Ahead; Businesses Disappoint

Consumers jumped on discounts and credit to leverage their incomes in November, with spending slightly outpacing solid, inflation-adjusted, disposable income gains during the month. Spending on big-ticket vehicles and holiday gifts both bounced back

CPI Firms Year-on-Year

The Consumer Price Index (CPI) flattened out the during the last two months as falling prices at the gas pump pulled down the overall index once again. However, we are finally starting to see some firming on a year-over-year basis with the CPI edging up 0.5% from a year ago. The reason is that we [...]

Yellen’s Big Test

Yet another round of market jitters, triggered by plummeting oil prices (OPEC has lost control of the oil market) and related problems in the high-yield bond market have raised questions about whether the Federal Reserve will actually pull the trigger and finally lift short-term interest rates from the zero bound. The moves we saw overnight [...]

Consumers Make Trade-offs

Real disposable incomes rose 0.4% in October, slightly faster than September, while inflation-adjusted spending rose a tepid 0.1% during the month, weaker than September, which was actually revised down. The saving rate picked up, but something more than caution alone appears to be happening.

Inflation Offers Fed Confidence

The Consumer Price Index (CPI) rose 0.2% in October compared to one month ago and one year ago. Core (nonfood and nonenergy) inflation also rose 0.2% as the drag from energy prices abated and the push from medical care services intensified.

Producer Prices Drop

Producer prices unexpectedly fell 0.4% in October as services inflation fell well short of expectations for the second straight month. Another sharp drop in inflation in the services sector,

Inflation and Wages Still Muted

Personal income and outlays both rose an inflation-adjusted 0.2% in September. Falling prices at the gas pump continued to buoy spending. The personal consumption expenditures (PCE) index, which more accurately measures inflation than the consumer price index (CPI), fell by 0.1%.

Janet Yellen’s Punk Rock Moment

The Clash at the Fed: Watching the Federal Reserve and its communications regarding liftoff [the Fed’s term for exiting the zero bound on short-term interest rates] and initiating the first rate hike in nearly a decade is much like listening to the ambiguity in the 1981 song by the punk rock band The Clash. Should I [...]

Inflation Chill in October

The consumer price index fell 0.2. % in September in response to falling prices at the gas pump and aggressive incentives on light vehicles.

Minutes Point to Emerging Fed Consensus

As we expected, the minutes from the Federal Open Market Committee (FOMC) September meeting show members are much more ready to move than the September statement suggested. The Fed’s balance sheet will be used to calibrate policy and will stay elevated for longer to cushion against external shocks after liftoff. There is a growing consensus [...]