The oversized base effects of oil prices could not in February 2017 push up overall US imports. The United States purchased, according to the Census Bureau, 71% more crude oil from global markets this February than in February 2016. In raw dollar terms, it was an increase of $7.3 billion year-over-year. Total imports, however, only gained $8.4 billion, meaning that [...]
For the first time in 57 months, a span of nearly five years, the Fed’s preferred metric for US consumer price inflation reached the central bank’s explicit 2% target level. The PCE Deflator index was 2.12% higher in February 2017 than February 2016. Though rhetoric surrounding this result is often heated, the actual indicated inflation is decidedly not despite breaking [...]
Far be it for me to defend Mario Draghi, but earlier this month when it was revealed that Eurozone inflation burst above the 2% target level for the first time in four years the mainstream characterized his demeanor as being more than what it really was. That says something about the media as well as Draghi, where the former is [...]
Why did Mario Draghi appeal to NIRP in June 2014? After all, expectations at the time were for a strengthening recovery not just in Europe but all over the world. There were some concerns lingering over currency “irregularities” in 2013 but primarily related to EM’s and not the EU which had emerged from re-recession. The consensus at that time was [...]
The last time oil inventory grew at anywhere close to this pace was during each of the last two selloffs, the first in late 2014/early 2015 and the second following about a year after. Those events were relatively easy to explain in terms of both price and fundamentals, though the mainstream managed to screw it up anyway (“supply glut”). By [...]
Retail sales comparisons were for February 2017 skewed by the extra day in February 2016. With the leap year February 29th a part of the base effect, the estimated growth rates (NSA) for this February are to some degree better than they appear. Seasonally-adjusted retail sales were in the latest estimates essentially flat when compared to the prior month (January). [...]
The Consumer Price Index increased 2.74% in February 2017 over February 2016. That was the highest inflation rate registered in this format since February 2012. As has been the case for the past three months, the acceleration of headline inflation is due almost exclusively to the sharp increase in oil prices as compared to the lowest levels last year (base [...]
Something had to give one way or the other. With all the oil traders piled onto the long side, either demand had to seriously pick up (or plausibly appear ready to do so) or the weak hands would start to capitulate. But as WTI has pulled back from $54 to around so far $48, the futures market remains nearly as [...]
Conventional wisdom right now says that the Fed is going to raise rates because the economy and by extension labor market are still improving. The word “improving” is subjective, so to further justify that sentiment, the CPI is back over 2% and the PCE Deflator just might join it in February. By the light of these major contributions there is [...]
If there is still no current or present indication of rising economic fortunes, and there isn’t, then the “reflation” idea turns instead to what might be different this time as compared to the others. In 2013 and 2014, it was QE3 and particularly the intended effects (open ended and faster paced, a bigger commitment by the Fed to purportedly do [...]
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