For the first time since February 2022, the RSM US Financial Conditions Index has turned positive amid a robust economy, strong labor market, easing inflation and rising real wages and personal disposable income. Barely above zero, our index indicates normal levels of risk being priced into the ... READ MORE >
Federal Reserve
Spending remains strong as a key inflation gauge declines toward Fed’s target
Inflation dynamics to close out last year strongly point to a near-term return to the Federal Reserve’s 2% inflation target amid a solid labor market, strong spending and real income gains. While both top-line and core inflation are rapidly advancing toward the Fed’s target, inflation-adjusted ... READ MORE >
U.S. economy booms at a 3.3% pace in the fourth quarter
The U.S. economy expanded at a robust 3.1% pace from a year ago and closed the year with a booming 3.3% rate of expansion on the quarter, according to Commerce Department data released Thursday. The strong gains were driven by household consumption, gross private investment and government spending ... READ MORE >
Consumer sentiment rises above expectations in January
Consumer sentiment rose in January to the highest level since August 2021 as inflation concerns eased. American consumers showed more confidence in the economy, both now and in the future, the University of Michigan reported on Friday. The overall index increased to 78.8 from 69.7, much higher than ... READ MORE >
Initial jobless claims and housing starts post upside surprises
Filings for jobless benefits fell last week to their lowest level in 16 months, a testament for how resilient the labor market continues to be. Initial claims declined to 187,000 from 203,000 in the previous week, the Labor Department reported on Thursday. That was much lower than the pre-pandemic ... READ MORE >
Retail sales and industrial production point to a strong end of the year
Resilience not recession is the right "R" word to describe the American economy in December. Wednesday's data from the Commerce Department showed retail sales blowing past expectations while industrial production volume stayed solid. The upside surprises, together with a robust labor market, prompted ... READ MORE >
The price of eggs and public sentiment
Inflation is receding and the labor market is as healthy as it has been since the 1950s. Wages are higher in inflation-adjusted terms. Everyone who wants a job either has one or can find one quickly. And with the economy growing at healthy rate over the past year, one would think that Americans ... READ MORE >
December CPI: Sticky service and housing prices illustrate the difficult last mile in inflation fight
The December Consumer Price Index captures both the broader disinflation taking place inside the goods sector and the persistent inflation inside the service sector. Each generates its own economic and policy narratives that carry implications for the economy in a year of a closely fought ... READ MORE >
Rate normalization and the return of risk
Financial markets had a difficult start to the year after an exuberant end to last year. The yield on 10-year Treasury bills dropped from 5.0% to 3.8% to end the year as investors priced in an early start for monetary policy easing. Now, as the Federal Reserve signals rate cuts, we think conditions ... READ MORE >
December employment report caps an extraordinary year of 2.7 million jobs added
The U.S. economy added 216,000 jobs in December, closing out an extraordinary year that saw an increase of 2.7 million in total employment and a record 167 million Americans employed. During the past year, the unemployment rate averaged 3.6% and closed the year at 3.7% in the best year for labor ... READ MORE >