Data Watch

Industrial Production also dances to the Fed´s beat

When the Fed tightened monetary policy (falling nominal spending (NGDP) growth) from mid-2014 to mid-2016, manufacturing production growth faltered, picking up when monetary policy was “eased”. Since the start of the year, the Fed has again slipped into tightening mode and NGDP growth turned down. Manufacturing output growth follows suit. That´s one more sign of

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Retail Sales in July

After experiencing declining growth during the first half of the year, in July retail sales posted above expected growth. Unfortunately, that´s not a prelude to any sort of improvement. Like all other measures of the nominal economy, retail sales, here depicted by the core version, which excludes auto sales, has remained depressed. And when you

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When will the Fed run out of patience?

They have extended their “patience horizon” until next year. From Bill Dudley: “People think about inflation typically on a year-over-year basis, and those year-over-year measures are going to be depressed for a while,” Dudley said. “But thinking about it sequentially, we would expect the inflation data to show a little bit more upward pressure than

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Compared to the second quarter of 2016, productivity increased at a 1.2% rate, quite a bit above the 0.7% year-on-year average observed since late 2010. With productivity rising, unit labor costs, the price of labor per unit of output, fell 0.2% year-on-year in the second quarter. Coming on the heels of a recent moderation in

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"Shoot the Messenger"

Since the “Change in Labor Market Conditions Index” has been contradicting Yellen and the Fed for some time… it has been “shot down”: Notice: As of August 3, 2017, updates of the labor market conditions index (LMCI) have been discontinued; the July 7, 2017 vintage is the final estimate from this model. We decided to stop updating the

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All interested parties are aware of the numbers, so I don´t need to go over the details. To recap, since the end of 2015, the unemployment rate has gone from 5%, after reaching 9.9% in early 2010, to 4.3%, while the labor force participation has wiggled sideways between 62.6% and 63% after clocking an average

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On Inflation, it´s “Bye-bye Black Bird”

Despite recent soft inflation readings, Fed Chairwoman Janet Yellen said at her congressional testimony in July that it was “premature to conclude that the underlying inflation trend is falling well short of” the Fed’s target”. In tongue twisting fashion she said: ”We have quite a tight labor market and it continues to strengthen, and experience

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GDP Report: Revisions indicate Fed has performed worse than thought

Annualized RGDP growth came in at 2.6%, very close to the 2.7% expected. New information was the data revision going back to 2014. The charts illustrate for RGDP and NGDP growth year-on-year. It appears that real (and nominal) GDP were higher than previously thought in 2014 and 2015, but lower in 2016. This means the

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Durable Goods Orders: “Aircraft Noise”

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

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Consumer Confidence & Sentiment Diverge

You could think that the two best-known consumer surveys – Consumer Confidence and Consumer Sentiment – the first from the Conference Board and the second from the University of Michigan would show similar performances, but they often don´t. As the chart shows, for the past year the two surveys conflict: Conference Board questionnaires place greater

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