personal consumption expenditures

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 [...]

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 [...]

Trying To Project The Goods Trade Cycle

By |2021-12-16T19:16:24-05:00December 16th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One quick note on yesterday’s retail sales estimates in the US for the month of November 2021. The increase for them was less than had been expected, but these were hardly awful by any rational measure. Instead, they seemed to further indicate only what we had proposed upon release of the October estimates: Christmas shopping came a bit early for [...]

GDP Red Flag

By |2021-10-28T20:15:57-04:00October 28th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There were no surprises in today’s US GDP data. As expected, output sharply decelerated, modestly missing much-reduced expectations. The continuously compounded annual rate of change for Q3 2021 compared to Q2 was the tiniest bit less than 2% (1.99591%) given most recent expectations had been closer to 3%. It was only two months ago, mid-August, when the Blue Chip consensus [...]

No Inflation Without Income; There’s No Income

By |2021-10-01T19:57:46-04:00October 1st, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Money, economy, income. Those are the three ingredients that make textbook inflation and keep it together. Money flowing naturally through the economy turns into organic income which if out of balance with the rest of the macro factors can create broad-based and sustained consumer price increases. If actually caused by the combination of those three, the result would be the [...]

Inflation Isn’t Just The Outlier, The Inflation In It Is, Too

By |2021-06-28T16:30:15-04:00June 28th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Following the same recent pattern as the BLS and its CPI, the Bureau of Economic Analysis’s (BEA) PCE Deflator ran up hotter in May 2021 than its already high increase during April. The latter’s headline consumer basket rose 3.91% year-over-year, its fastest pace since August 2008. The core rate, which excludes food and energy prices, accelerated to 3.39% from 3.11%, [...]

Well, That Clears Up Nothing

By |2021-04-29T20:14:58-04:00April 29th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Disappointing some, US real GDP managed to come in 6.2% higher in Q1 2021 when compared to Q4 2020. This was slightly less than the “consensus” which had figured around 6.6% growth and then the more optimistic calculations including the Atlanta Fed’s GDPNow tool that had only yesterday pointed to 8% (with some outlier whispers dialing up double-digit gains). Even [...]

Some Specifics of ‘Transitory’

By |2021-04-28T17:11:05-04:00April 28th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Silver linings have been hard to come by lately, especially last year. Twenty-twenty was a total washout in almost every way imaginable; and that’s an understatement. Still, there were some small signs of genuine progress such as Jay Powell’s thorough contribution to QE debunking. Bank reserves went sky high while practically nothing else did (other than equities), certainly not inflation. [...]

Uncle Sam Bribes His Way Into Goldilocks’ Not-yet Thirsty Bears

By |2021-02-26T17:50:54-05:00February 26th, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the Federal Reserve’s preferred inflation measure, the PCE Deflator, consumer price pressures remained muted in January 2021. No surprise, given the absence of inflationary conditions contained within the prior released CPI report for the same month, as even the contribution from surging oil prices was noticeably minimal in both. The Bureau of Economic Analysis (BEA) today said that [...]

What’s Job (cuts) Got To Do With It (everything)

By |2020-10-01T19:34:47-04:00October 1st, 2020|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Survivor’s euphoria, but then what? Reopening momentum, though would that be enough on its own? More of a concern, the uptrend was heavily infused by government intervention. How much was organic, how much wastefully artificial (in the sense of “stimulus”; as economic aid, it was necessary)? So many questions, so much to try and sort out as we enter the [...]

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