The Federal Reserve’s preferred measure of inflation continued to ease in May as the personal consumption expenditures Index remained unchanged on the month and rose by 2.6% from a year ago. The core PCE index, which excludes the more volatile food and energy components, advanced by 0.1% and increased ... READ MORE >
Inflation
Canada’s inflation rises to 2.9% but rate cut remains on the table
Disinflation will be the theme in the Canadian economy for the rest of the year, despite the inflation uptick in May. Inflation rose to 2.9 per cent on a year-over-year basis in May, with a 0.6 per cent monthly increase, Statistics Canada reported on Tuesday. Core inflation measures also rose slightly ... READ MORE >
U.S. harmonized index of consumer prices: A more accurate metric of disinflation?
Part of a central bank’s challenge in setting its policy rate lies in knowing which measure of inflation to follow. From the consumer price index to the personal consumption expenditures index, different measures of inflation can tell a different story. On Friday, investors and policymakers will ... READ MORE >
U.S. inflation expectations are well anchored as Fed nears decision
American inflation expectations remain remarkably well anchored given the price shock of the past two and a half years. Our preferred measure of inflation expectations—the Federal Reserve’s five-year forward, five-year breakeven rate and the five-year forward breakeven index—imply that professional ... READ MORE >
Jobless claims ease as housing starts drop
Initial jobless claims dropped by 5,000 last week to 238,000 yet remained elevated near a 10-month high. For now, the spike in new claims in the previous weeks looks a lot more like a seasonal issue than a deterioration in labor market conditions. In contrast, housing starts fell in May to the lowest ... READ MORE >
U.S. gas prices poised to decline by 10% ahead of July 4
Traditionally, gasoline prices in the United States peak just ahead of the July 4 holiday as consumers get ready to hit the road and vacation season begins. But this year is shaping up to be a different story. Because of supply conditions and easing demand, domestic gasoline prices peaked at $3.67 per ... READ MORE >
Consumer sentiment falls more than expected
Consumer sentiment dropped to 65.6 in June, a seven-month low, which was much less than expected with declining sentiment on personal finances as the focus, according to the University of Michigan survey released on Friday. The subindex for personal finances fell to 79, the lowest since October. The ... READ MORE >
PCE inflation preview: From noise to norm, rate cuts are on the horizon
Following the release of the consumer price index and producer price index this week, we are now forecasting a 0.084% increase in the May personal consumption expenditures index, translating to a 2.6% increase on a year-over-year basis. This will appear in the forecast table as a 0.10% estimate. But we ... READ MORE >
Initial jobless claims jump as inflation continues to improve
Initial jobless claims jumped to 242,000 for the week ending June 8 from 229,000 the week before, the Labor Department reported on Thursday. The latest figure was the highest level in almost a year, nearing the threshold of 250,000 that in our view signals conditions for a possible recession. It ... READ MORE >
FOMC holds rates steady but is divided on their direction
The Federal Open Market Committee kept its policy rate in a range between 5.25% and 5.5% at its meeting on Wednesday while signaling through its dot plot forecast of interest rates that the committee would support at least one 25 basis-point rate cut this year. But the committee was split on the ... READ MORE >