pce

Macro: GDPNow — doubled

By |2023-12-19T10:59:54-05:00December 19th, 2023|Economy|

After a terrible ISM survey at the beginning of the month, GDPNow was indicating 1.2% growth. After a strong employment and retail sales report, GDPNow has more than double to 2.6%. Strong employment leading to strong consumption is the theme. Personal consumption is 68% of the economy and driving 78% of growth this quarter. Disclaimer: This information is presented for [...]

Macro: Incomes and Consumption Expenditures — a good report — be careful what you wish for

By |2023-12-01T09:23:49-05:00November 30th, 2023|Markets|

This was a very positive report. The consumer is showing no signs of pulling back or needing to pull back in the near term, buoying GDP and GDP expectations. Interest rates float higher on the news. A quick comment on market dynamics and reactions to releases such as this one. First, everything is relative to expectations. And for a report [...]

Macro: Retail Sales

By |2023-11-17T14:59:04-05:00November 17th, 2023|Economy, Federal Reserve/Monetary Policy, Taxes/Fiscal Policy|

Retail sales make up about a quarter of GDP, so an important monthly number. I saw a lot of headlines saying this was a disappointing number. But that isn't the case, the print was actually good. Sequentially, expectations were low for this print because September 2023 and October of 2022 were so strong. The sequential number was expected at -.3% [...]

Macro: Inflation Measures PCE and GDP deflator

By |2023-10-26T17:17:02-04:00October 26th, 2023|Economy|

Measures of inflation GDP price deflator: 3.24% Personal Consumption Expenditure (PCE) Price Index YoY: 3.43% Core PCE (ex-Food and Energy): 3.9% All well above 2% target. All have been coming down. Disclaimer: This information is presented for informational purposes only and does not constitute an offer to sell, or the solicitation of an offer to buy any investment products. None [...]

Some ‘Core’ ‘Inflation’ Difference(s)

By |2022-04-29T19:33:52-04:00April 29th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The FOMC meets next week, with everyone everywhere expecting a 50 bps rate hike to be announced on Wednesday. Yesterday’s “unexpected” and “shocking” negative GDP is unlikely to deter anyone on the committee. Most have already dismissed it as nothing more than quirky, temporary factors, not unlike when they did the same to Q1 2014’s similarly negative result. At least [...]

Is It Recession?

By |2022-04-28T20:30:20-04:00April 28th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to today’s advance estimate for first quarter 2022 US real GDP, the third highest (inflation-adjusted) inventory build on record subtracted nearly a point off the quarter-over-quarter annual rate. Yes, you read that right; deducted from growth, as in lowered it. This might seem counterintuitive since by GDP accounting inventory adds to output.It only does so, however, via its own [...]

The Short, Sweet Income Case For Ugly Inversion(s), Too

By |2022-04-01T19:21:53-04:00April 1st, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A nod to just how backward and upside down the world is now. The economic data everyone is made to pay attention to, payrolls, that one is, in my view, irrelevant. As is the consumer price estimates from earlier this week, the PCE Deflator. That’s another one which receives vast amounts of interest even though it is already old news.Yet, [...]

These Are The Charts/Data The Fed Is Ignoring In Its Rush To Mistake Rates

By |2022-02-25T17:25:48-05:00February 25th, 2022|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The labor theory of inflation, the one the FOMC will use to justify rate hikes in 2022 (as far as they might go), isn’t just wages and competition for the presumed scarce marginal worker. While a tight labor market might drive up the marginal cost for labor inputs, in order for companies to then pass those higher costs back to [...]

All The Curves, From Supply To Demand To Yield

By |2022-01-28T17:52:25-05:00January 28th, 2022|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Technically speaking, the rebound from the 2020 recession wasn’t strictly a supply shock. That was a huge part of it, no doubt, but a near-concurrent demand shock, if you will, also materialized. The combination of the two left the public bewildered, believing it an actual inflationary impasse which could only be further passed on into this year.Consumer prices did rise, [...]

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