Economies in recession do not produce 528,000 jobs in a given month and have 3.5% unemployment rates. Since January, total employment has increased by 3.3 million jobs and the unemployment rate has declined from 4% to 3.5%. With such a robust labor market, claims that the economy is in recession fall ... READ MORE >
Federal Reserve
Labor force dynamics: 60,000 jobs per month are needed to keep the jobless rate near 4.4%
Long-run changes in the labor force have slowed its growth and are likely to result in a shortage of workers even if the economy falls into recession. Between 2008 and 2020, the labor force grew at an average rate of 0.06%. Assuming that does not slow further—it very well could because of ... READ MORE >
FOMC policy decision: Fed hikes policy rate by 75 basis points
The Federal Reserve’s price stability campaign advanced at its Wednesday meeting via a hike in the federal funds policy rate by 75 basis points to a range between 2.25 and 2.5%. The central bank stuck to its pace of balance sheet reduction. At this critical juncture, with the policy rate residing in ... READ MORE >
Unexpectedly strong durable goods orders and trade data temper recession concerns
U.S. durable goods orders and the goods trade deficit in June beat expectations, according to data released Wednesday, tempering recession concerns before the Federal Reserve is expected to announce a rate hike later in the day. On top of that, shipments of nondefense capital goods excluding aircraft—a ... READ MORE >
Monetary policy tightening, the bond market and the business cycle
Central banks in developed economies are contending with a series of shocks that have threatened price stability and, ultimately, economic growth. Now, these shocks, which include inflation, interest rate increases and energy market turmoil, are all showing up in fixed income markets. With consumer ... READ MORE >
Consumer confidence drops as new home sales slump
Consumer confidence continued to fall in July to the lowest level since February 2021 amid inflation angst and an economic slowdown, the Conference Board reported on Tuesday. The top-line number fell to 95.7 from 98.4 in June, driven by broad declines across all components. But there was good news: ... READ MORE >
FOMC policy decision preview: Fed to hike lending rate .75% next week
A 100-basis-point increase in the federal funds rate will be on the table during the Federal Open Market Committee meeting next week, but we expect the central bank will hike the policy rate by 75 basis points. The fourth boost to the lending rate this year will come amid clear signs of global and ... READ MORE >
Wholesale gas futures point to drop below $4 a gallon
An overheating economy and hot summer weather have put the American public on edge as rising inflation has deflated domestic purchasing power. Hot tempers and hotter thermostats may, however, find some relief during the final six weeks of summer through an easing in gasoline prices. Wholesale ... READ MORE >
Consumer sentiment eases as industrial production falls
Consumer sentiment bounced off a historical low to 51.1 in July from 50.0 in June as gasoline prices eased markedly. That resulted in lower readings for inflation expectations for both the short-term one-year outlook and the long-term five- to 10-year expectations, according to survey data released by ... READ MORE >
Retail sales rebounded in June amid elevated inflation
Retail sales posted solid growth in June yet likely failed to offset sky-high inflation for the second straight month, government data showed on Friday. Most of the increases came from higher gasoline prices in the first half of June, not stronger demand. Retail sales rose by 1.0% in June before ... READ MORE >