It is understandable why everyone is right now fixated on Washington. The repeal, or not, of Obamacare is, to paraphrase former Vice President Biden, a big deal. In terms of market expectations, it is difficult to discern by how much. That was to be, after all, but one step of several reductions to the administrative burden on the economy. Maybe [...]
For the 55th consecutive month, the PCE Deflator came in under the 2% inflation target for the Federal Reserve’s inflation mandate. The Bureau of Economic Analysis reported last week that inflation in November 2016 actually decelerated slightly from its meandering pace set more by oil price base effects than $4.5 trillion on the Fed’s balance sheet. Year-over-year the PCE Deflator [...]
The CPI continued its meandering in November, increasing 1.69% year-over-year in a very slight acceleration to October’s 1.64% gain. As oil and energy prices this year are compared to the worst levels last year, the CPI is brought back up not to what it would look like in an actually robust growth period but rather what it was in the [...]
Economic Reports Scorecard There was little improvement in the economic data the last couple of weeks, the Citigroup Economic Surprise index still well below zero (-8.1). And frankly, where there was improvement such as the GDP report, it doesn't look sustainable...unless the US is about to become a soybean exporting powerhouse. Anything is possible I suppose but counting on Brazil [...]
Personal Income and Spending continue to suggest only further weakness. While there is a whole lot of caution necessary when analyzing this data due to its susceptibility to large revisions, there is still only further deceleration on both sides of the consumer. Nominal Disposable Personal Income (DPI) was up just 3.4% year-over-year in September 2016, below the 3.8% average of [...]
According to the TIC estimates, more than half a trillion in UST’s have been perhaps liquidated from foreign official holdings since October 2014. More than half of that total has taken place just in 2016 alone in the eight months through August. And, of course, in that time UST nominal rates have only fallen and sharply so, contradicting the nightmare [...]
As I argued earlier, the 2-year change in the CPI (or PCE Deflator) is a useful assessment of not just inflation but money in general. It verifies in no uncertain terms what we suspect about “stimulus.” It is not just rare but practically unheard of where the inflation rate drops and then stays there. Yet, inflation has done so now [...]
The headline CPI accelerated to 1.46% year-over-year in September, the highest calculated inflation rate for this index since October 2014. That was up from 1.06% in August and seemingly quite different than the -0.04% last September. To many, that looks like and is believed to be progress, an end to the drag of the dollar and oil. In many ways [...]
Woe to the unemployment rate. Without it so much confusion and angst might have been avoided, though admittedly that more realistic view would have been itself darker but at least clear. In August 2014, Federal Reserve Vice Chairman Stanley Fischer unleashed a brief but powerful storm of realism upon the bubble of monetary policy. Perhaps it was because his target [...]
I generally shy away from sentiment surveys as almost a rule because I believe they are more often than not misleading. The various indices of consumer confidence fall into that categorization, especially over the past few years. According to many, consumer confidence is back to where it was during the housing bubble even though by nearly every other statistic, particularly [...]
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