JUNE 17, 2019 – CPI BARELY MOVES UP IN MAY; ARE LOWER RATES AHEAD? US consumer prices rose by 0.1 percent last month.  In the 12-months through May, CPI was up 1.8%, marginally lower than April’s 1.9% gain. The Fed looks to the PCE price index as its preferred inflation measure; it is currently running at 1.6%, well below the …

JUNE 10, 2019 – COULD RATES BE CUT IN AS LITTLE AS 10 DAYS? Last week’s Labor Department report was disappointing; it stated the US economy added 75,000 new jobs in May, one of the weakest increases since the recovery began in the middle of 2009. The jobless rate held steady at 3.6 percent.  The US economy is still growing, …

JUNE 3, 2019 – CONSUMER CONFIDENCE RISES, BUT YIELD CURVE SIGNALS POSSIBLE RECESSION May consumer confidence soared following the unexpectedly good jobs number posted for April. This is significant, as consumer spending is the primary driver of GDP, and confidence is at its highest level since November.  Unemployment continues to come in at historically low levels; the data has not …

MAY 28, 2019 – ST. LOUIS FED CHAIR SPEAKS TO INTEREST RATES Last Wednesday, St. Louis Fed Chair James Bullard spoke at the Foreign Correspondents’ Club in Hong Kong.  He drew attention to two key challenges facing the FOMC: the risk of the Fed missing its 2 percent inflation target and the current trade war. Bullard, a voting member, hinted …

MAY 20, 2019 – MORE GOOD NEWS AS CONSUMER CONFIDENCE SOARS FOR NOW The May consumer confidence index rose to 102.4 from 97.2 in April.  Economists had not expected much of a rise month over month, so the results, a 15-year high, came in as a surprise. However, the poll was taken before the US-China trade deliberations turned negative this …

MAY 13, 2019 – ARE Q1 RESULTS NOT SUSTAINABLE?  The pace of economic growth in the first quarter of this year was robust, but economists do not believe the pace is sustainable going forward.  The median estimate for growth in 2019 has risen to 2.6 percent, from 2.4 percent, to accommodate the Q1 results.  Forecasts for the second half of …

MAY 6, 2019 – SURGE IN NEW JOBS CREATED, UNEMPLOYMENT RATE FALLS The Labor Department announced Friday 263,000 new jobs were created in April, beating expectations for 190,000 new jobs.  The unemployment rate is now at 3.6 percent, near a 50-year low. Wages grew at 3.2 percent, slightly below expectations for 3.3 percent. Much of the economic data released recently …

APRIL 29, 2019 – Q1 GROWTH RATE SMASHES EXPECTATIONS The Commerce Department announced the U.S. economy picked up steam in Q1 of 2019.  GDP grew at an annual rate of 3.2 percent, up from 2.2 percent at the end of last year, a turnaround from six weeks ago, when expectations were for GDP growth of 2 percent or less. Economists …

APRIL 15, 2019 – MARCH CPI BEATS EXPECTATIONS The Labor Department announced US consumer prices rose the most in 14-months, advancing 0.4 percent as a result of increases in the costs of food, gasoline and rents.  It was the biggest rise since January 2018, and doubled February’s gain of 0.2 percent.  However, underlying inflation remains low as the domestic and …

APRIL 8, 2019 – JOBS NUMBERS RISE IN MARCH, COULD FEBRUARY HAVE BEEN AN OUTLIER? After abysmal data in February, it looks like employment is back on track.  The US economy added only 33,000 jobs in February, but this month, 196,000 new jobs were created. This rebound in hiring could lift confidence in the economy as well as ease fears …