Data Watch

Manufacturing Output: A depressing picture

What´s going on with industrial output best reflects the economy´s depressed state. Note that for the first 6 or 7 months of the recession, this cycle was on a par with the others. After that, mid-2008, the economy, including manufacturing output takes a surprising dive. That was what economists did not (and hardly could have)

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The consumer remains on the sidelines while inflation languishes

Stripping out hurricanes impacts on auto and gasoline sales, retail sales growth remains pitiful. That´s clear when you compare sales growth over the past two years with growth in the years before the crisis. Meanwhile, average CPI-Core inflation on average was much the same in the two periods. The only reason the Fed obsesses with

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The employment report – Hurricane despair

It´s likely that the hurricanes that battered parts of the country were responsible for the first negative payroll in more than seven years. However, bars and restaurants will reopen cars vans and trucks and other durables replaced, so the coming months are likely to show a bounce back from the hurricane’s effects and a stimulus

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How long does “temporary” or “transitory” last?

Yellen has made her position (shared by others at the FOMC) clear: First, she is somewhat puzzled by the inflation data. Second, that bewilderment will not deter them from keeping to their established “hike path”. Interestingly, two years ago she delivered a speech, which was all about inflation, in fact setting the foundation for beginning

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The GDP report: An alternative take

Some showed a “positive spirit”: From CNBC: Growth last quarter was the quickest since the first quarter of 2015 and followed a 1.2 percent pace in the January-March period. Economists had expected that the second-quarter GDP growth rate would be unrevised at 3.0 percent. With GDP accelerating in the second quarter, the economy grew 2.1

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Durable Goods Orders: In “stall speed”

What makes Durable Goods Orders a “high profile” indicator is that it can foreshadow significant changes in economic activity sooner than other statistics. That´s because it is about production that will take place in the months ahead. It is important to keep in mind, however, durable goods orders are highly volatile month-to-month due, in large measure,

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Hard data on retail sales & manufacturing contradict consumer sentiment and manufacturing surveys

  Always in search of “justifications” for undesired results the Fed, after using cell phone connection prices and other “excuses” for falling inflation, now says it´s Harvey´s fault for industrial production, including manufacturing, to frustrate expectations: The Fed said Hurricane Harvey, which hit the Gulf Coast late last month, was responsible for most of the

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In this expansion, Phillips went AWOL

To some: U.S. consumer prices rebounded in August, a sign of economic vigor that could nudge the Federal Reserve closer to raising a key interest rate. Reality, however, is a different beast. Headline CPI is prompted by oil prices (with gas prices impacted by Mr. Harvey). It, however, does not “intrude” the ranks of core

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The Employment Report: A wages “puzzle”

It´s just one more of the “puzzles” the Fed faces. Yesterday the inflation “puzzle” just got a bit “bigger”, given that inflation (Core PCE) continues to move in the “wrong” direction, going “south” instead of “north” as the Fed has been “forecasting” for some time. The San Francisco Fed has been making efforts to “solve”

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PCE Inflation Report: The Fed ‘tricked’ again

Instead of climbing towards 2%, as the Fed is constantly “forecasting”, core PCE inflation has ticked down to 1.4% YoY while headline PCE inflation stayed pat (mostly because oil prices ticked up YoY). Being a monetary phenomenon, inflation has to be ‘motivated’ by monetary policy. Unfortunately, that´s something few seem to understand. Certainly the Fed

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