Tag Archives: inflation
Inflation Low; Wages Decline; Housing Disappoints
The Consumer Price Index (CPI) rose a modest 0.1% in May, with a spike in natural gas prices and electricity costs offsetting declines and negligible increases in nearly all other categories. Food prices dropped, everywhere but in restaurants (which explains some of the weakness in dining out in May), despite increases in agricultural prices. Food [...]
Production Levels Remain Weak in May
Industrial production flatlined in May after declining in April. Gains in the mining sector were offset by a sharp drop in utilities production. March and April were unusually cool months for spring, which meant more use of heat than usual for those months. Production of consumer goods was mixed, with gains in vehicles and everything [...]
Headline PPI Overstates Inflation Pressures
The Producer Price Index (PPI) rebounded 0.5% in May after declining sharply in April. Higher prices at the pump and natural energy prices for residential use accounted for the majority of the rebound. The PPI, excluding food and energy, rose a modest 0.1%. Pipeline inflation continued to moderate, which is an issue for the Federal [...]
Consumer Spending Headline Overstates Weakness
Personal consumption expenditures declined 0.2% in April, after being revised down slightly for March. Inflation abated, however, which means that consumer spending squeaked out a small, 0.1% increase after adjusting for price changes. Falling prices at the pump (everywhere but in Chicago, where refinery problems raised prices) pushed inflation down during the month. We also [...]
Question I received on inflation this morning:
There are multiple inflation measures, the most used and least accurate of which is the Consumer Price Index (CPI). The CPI is measured from a fixed basket of goods; prices are adjusted for quality improvements where possible. Historically, the overall index has converged to the core index, so excluding food and energy prices is important [...]
Housing Disappoints and Inflation Moderates
Today’s data confirm a picture of moderation in growth this spring. Housing starts were significantly lower than expected in April at an annualized rate of 853,000, while the data for March was revised down. The largest drop was in multi-family units, which plummeted 142,000 units over the month, with declines heavily concentrated in the South.
Producer Prices Continued to Drop on Food and Energy
Producer prices plummeted 0.7% in April, after falling at almost the same pace in March. Declines were largest in food and energy, as prices excluding those two components eked out a modest 0.1% increase and continued to moderate from the pace in previous months. The only major increase in the index for finished goods in [...]
Housing Starts Jump; CPI Abates
Housing starts crossed the one million unit threshold in March to an annualized level of 1,036,000; that’s 7% above the pace of February and 46.7% above the suppressed level of last year. Gains were concentrated in multifamily starts, which had slowed a bit over the last few months and reflect more of a catch-up in [...]
Retail Sales Drop on Chilly Weather and Cooling Economy
Retail sales dropped 0.4% on a drop in vehicle sales and falling prices at the pump. This suggests that much of the rise in vehicle sales that we saw in March was due to a recovering housing market or to business investment rather than pent-up consumer demand. Pickup trucks are the workhorses of the single-family [...]
Fed Stays Course, Evaluates Efficacy of QE3
The Federal Open Market Committee (FOMC) voted to stay the course, hold interest rates low and continue to expand its balance sheet by $85 billion per month until “the labor market has improved substantially.” The vote was as expected, eleven for the policy and one dissent; Esther George of the Kansas City Federal Reserve Bank [...]
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