Category Archives: Economic Analysis

Has spring sprung for capital expenditures?

New orders for durable goods jumped 2.6% in March. That’s on top of a 2.1% increase in February. A key component, the nondefense capital goods excluding aircraft orders, bounced from -1.1% in February to 2.2% in March. It’s still early, … Continue reading

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Is this the end of housing’s contribution to growth?

Existing-home sales were flat in March, coming in at a 4.59 million seasonally adjusted annualized pace. The buying/selling pace of existing homes has fallen since mortgage rates popped up in 2013, but the pace looks to be stabilizing. Prices are … Continue reading

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FOMC job #1: Don’t rock the boat

There was a lot of disagreement when the Federal Open Market Committee (FOMC) met last. The Federal Reserve (Fed) held an unscheduled meeting on March 4 (more below), but the bulk of the FOMC minutes were from the March 18–19 … Continue reading

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Employment Situation: Recovered? Hardly.

My son likes to play the game London Bridge Is Falling Down. (He’s 2.67 years old. I hope he outgrows this quickly.) In the game, you parade in a circle while singing a little ditty, and then, at the end, … Continue reading

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Higher rates do not mean a tighter Fed

You sit down in the driver’s seat and put the key in the ignition. You turn the key. The car cranks but does not turn over. You wait a bit and repeat but with the same unfortunate results. You give … Continue reading

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Personal income and spending: Steady-and-not-ready rally

Both personal income and personal consumption expenditures increased 0.3% in February. The Federal Reserve’s favorite inflation indicator, the personal consumption expenditures price index, increased 0.1% in February, the same as January.

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Businesses still in wait-and-see mode

New orders for durable goods advanced 2.2% in February. Excluding the volatile transportation component, new orders increased 0.2%. Nondefense capital goods excluding aircraft orders declined 1.3%, but shipments advanced 0.5%. I like looking at this particular part of the report, … Continue reading

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Global tensions: Remember Syria?

While the media was fixated on Russia or the search for Malaysia Airlines Flight 370, a Turkish F-16 shot down a Syrian fighter jet that flew into Turkey’s airspace. Turkey has been opposed to Assad’s regime in Syria since 2011. … Continue reading

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There is more to low interest rates than the Fed

It’s a common belief among some investors that the Federal Reserve’s (Fed’s) bond-buying program is single-handedly propping up the bond market and keeping interest rates low. A closer look at the Fed’s flow of funds data, however, shows that the … Continue reading

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Unemployment and inflation: The great disconnect?

Summary Whether the data shows short-term or long-term unemployment, the relationship between unemployment and inflation is tenuous. The Phillips Curve has gone through many iterations, including approaches that apply it to expected inflation, different unemployment indicators, and various time frames—but … Continue reading

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