Category Archives: Economic Analysis

September’s CPI: More dispersion than inflation

The Consumer Price Index (CPI) increased 0.1% in September, or 1.7% year over year. Energy costs declined, but those declines were offset by increases in housing and food costs. For October, CPI growth could tip negative with the recent deeper … Continue reading

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What’s spooking the markets?

Maybe traders are getting easily spooked in anticipation of Halloween. Every weak data point out of Europe is sending equity indexes and government Treasury yields lower. Flat inflation in Germany and weak retail sales data in the U.S. are the … Continue reading

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For the Fed, the future is now?

The minutes from the Federal Open Market Committee (FOMC) meeting of September 16–17 suggest that the upcoming meeting on October 28–29 will be a doozy. Not only will the FOMC need to grapple with recent data that shows economic growth … Continue reading

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Employment situation normal?

Driven by gains in professional and business services, retail trade, and health care, payrolls increased 248,000 in September. July and August payrolls were revised higher to an aggregate of 69,000. The unemployment rate dropped to 5.9%. According to the household survey, from … Continue reading

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The ECB and the power of two

The European Central Bank (ECB) laid out its asset-purchase program today. The ECB will begin purchasing asset-backed securities (ABS) sometime during the fourth quarter and covered bonds starting in the middle of October. It expects the purchase programs will last … Continue reading

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The rise or fall—or staying the same—of manufacturing

The September Purchasing Managers’ Index (PMI) dropped 2.4 percentage points to 56.6% from August’s 59.0% reading. While the number is down, it’s still indicating growth. It’s important to remember that the PMI asks whether things have improved from the previous … Continue reading

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New-home sales: Trimming the tail

August new-home sales increased to a seasonally adjusted and annualized rate of 504,000, up from an upwardly revised rate of 427,000 the previous month. The Federal Reserve (Fed) seems keen on keeping housing activity going strong, so the drop-off in … Continue reading

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The Fed: Raising rates as economic maintenance, not tightening

“First, do no harm.” —Hippocratic Oath There is a story about the early days of the Christian Brothers’ winery, when the order first decided to try advertising its products. Being properly obedient, the brothers wrote to the Vatican for permission … Continue reading

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European Central Bank to headline at Oktoberfest?

The European Central Bank’s (ECB) first tender of its targeted long-term refinancing operation (TLTRO) was a bit below forecast. In June, the ECB announced that it was going to provide cheap funding to banks that expand lending to the non-housing … Continue reading

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The Wall Drug of Fed meetings

Thanks to a great marketing campaign, with billboards that say, “500 miles to Wall Drug,” a small mall in South Dakota is a major tourist attraction. It’s fun to go there, but I don’t know if it’s worth the drive, … Continue reading

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