The common thread between the inflation reports for January was a reacceleration in service-based inflation that is proving sticky and is not likely to abate enough for the Federal Reserve to pull back on interest rate increases. For this reason, we are changing our call on the path of monetary ... READ MORE >
inflation
Jobs and inflation data show a still-strong economy
Both producer inflation and jobless claims came in stronger than expected in the most recent government reports released on Thursday. The data adds further pressure on the Federal Reserve as it aims to steer the economy toward a soft landing. With strong data accumulating, current conditions ... READ MORE >
Retail sales post strong gains in January, though it may not last
Retail sales in the United States posted a stronger-than-expected rebound in January after two straight holiday months of disappointing declines. Sales increased by 3.0% on the month and by 2.3% if automobiles are excluded, according to the U.S. Census Bureau. Evan after controlling for ... READ MORE >
Inflation grew faster in January, bolstering the case for more rate hikes
Inflation accelerated in January, bolstering the case for the Federal Reserve to continue raising interest rates at its next two meetings. January’s Consumer Price Index increased by 0.5% on the month, rising from a 0.1% increase in December, and by 6.4% on a 12-month basis, the Bureau of ... READ MORE >
Rising interest payments, deficits and the debt ceiling crisis
The mounting stand-off over raising the federal government’s debt ceiling has put a renewed focus on the rising cost of financing the nation’s debt. While these interest payments are rising quickly as the Federal Reserve raises rates to tame inflation, it’s important to have some perspective. As ... READ MORE >
Jobless claims rise, but remain below pre-pandemic level
New jobless claims increased for the first time in six weeks, yet they remained under the pre-pandemic level despite a significant recent increase in layoff announcements. New filings for unemployment benefits increased by 7.1% to 196,000 for the week ending Feb. 4, the Labor Department ... READ MORE >
Fed hikes rates by 25 basis points as it approaches peak
Price stability for the past three decades has been defined as a 2% inflation target, far below the elevated levels of the past year. Now, after a year of aggressively raising interest rates to bring down inflation, the Federal Reserve faces the monumental choice on when to pause its rate hikes. On ... READ MORE >
Job openings rise again in December, adding to pressure on the Fed
Labor demand surged again in December after two consecutive drops, according to government data released on Wednesday hours ahead of the Federal Reserve's rate decision. The number of job vacancies jumped to 11 million in December from 10.4 million, mostly driven by seasonal-related categories like ... READ MORE >
Labor costs slow, setting the stage for smaller Fed rate hike
Labor costs decelerated in the last quarter of 2022, adding to the justification for the Federal Reserve to slow its rate increases to 25 basis points after its meeting on Wednesday. The index showed that labor cost growth fell to 1.0% on a quarterly basis, and to 5.1% on a year-ago basis for all ... READ MORE >
American consumers grow more cautious as spending falls
American consumers pulled back on their spending for the second month in a row in December amid a continuing economic slowdown and elevated inflation. Also contributing to the decline were weak income growth and the decreasing stock of excess savings. Spending fell by 0.2% in dollar terms and by 0.3% ... READ MORE >