Just as inflation appeared to be coming under control in recent months, rising tensions in the Middle East have shaken this view and now represent the major risk to our economic and inflation outlooks. The focus of this new uncertainty centers on the energy markets, which have been roiled by ... READ MORE >
Federal Reserve
Inflation expectations remain remarkably well anchored
The inflation shock of the past three years is abating. One reason is that expectations of inflation continue to remain remarkably well anchored. The Federal Reserve’s five-year inflation forward breakeven rate-—a closely watched measure of pricing expectations—stands at 2.3%, which is below the ... READ MORE >
U.S. retail sales fall in January as holiday hangover sets in
In a break from recent years, American consumers began the year on a weak note as retail sales dropped by 0.8% on a monthly basis in January, according to Census Bureau data released on Thursday. That drop was the first time since 2018 that sales at retail stores, online and food service places ... READ MORE >
CPI: Fed to remain patient as real wages rise 1.4%
Energy and goods disinflation continue to underscore slower growth in the U.S. Consumer Price index, which increased by 0.3% on the month and by 3.1% on an annual basis, according to Labor Department data released on Tuesday. Disinflation in the energy and the goods sectors has now resulted in a ... READ MORE >
Fed survey shows further improvement in financial conditions
The worst of monetary tightening for the financial market may be behind us, according to the latest quarterly Senior Loan Officer Opinion Survey released by the Federal Reserve on Monday. All indicators have shown significant improvement since the Fed ended its rate hike campaign. Lending standards ... READ MORE >
Service sector grows faster than expected in January
The service sector continued its impressive expansion in January, growing for 43 of the past 44 months, according to the data released by the Institute for Supply Management on Monday. The overall index posted an upside surprise, rising to 53.4% from 50.5%. Anything above 49% generally indicates an ... READ MORE >
Hiring accelerates in January as unemployment remains below 4%
Remarkable, resilient and robust. There is simply no other way to describe the sustained strength in the U.S. labor market that has resulted in an American unemployment rate below 4% for 24 consecutive months for the first time since 1967. The U.S. economy created 353,000 new jobs in January on the ... READ MORE >
Productivity continues to rise in potential game changer for economy
Paul Krugman, the Nobel laureate in economics, once said that “productivity is not everything, but in the long run it’s almost everything.” The increase in American productivity over the past year, if sustained, is a potential game changer for the economy that represents that mythical rising tide ... READ MORE >
The Fed’s key wage gauge slows to lowest level since 2021
The Employment Cost Index—the Fed's key metric for wage growth that accounts for labor composition—slowed to the lowest level since June 2021, according to the Bureau of Labor Statistics on Wednesday. The overall index eased to 0.9% in the fourth quarter on a seasonally adjusted basis, down from 1.1% ... READ MORE >
Strong job openings and consumer confidence point to robust employment gains
December's strong data on job openings and consumer confidence released on Tuesday foreshadowed another robust month of job gains in January, aligning with our above-consensus estimate for net payroll increases when the employment report is released on Friday. Job openings in the United States inched ... READ MORE >