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 >
inflation
Revising our 2024 inflation outlook: Moving back to a 2% target
The recent easing in inflation, a clear downward trend in rents and what we think is a budding productivity boom have led us to revise our inflation forecast for the year. We now expect that the Federal Reserve’s preferred measure of inflation—the personal consumption expenditures price index—will ... 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 >
FOMC policy decision: Setting the predicate for rate cuts
The Federal Open Market Committee on Wednesday left is its policy rate unchanged between 5.25% and 5.5% and maintained the pace of quantitative tightening. The committee, however, made major changes to the policy statement that implies a coming upward revision in its economic forecast and a shift ... READ MORE >
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 >
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 >
Canada’s inflation accelerated to 3.4% in December
December’s Consumer Price Index report for Canada is another bump in the road in the path toward price stability. The overall index rose by 3.4% on a year-over-year basis in December, up from 3.1% in November, primarily because of the base effect, or comparisons to a year ago. Prices dropped from ... 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 >
U.S. income and spending see strong gains as year nears an end
This past year was a remarkable one in the American economy as inflation eased, employment gains remained rock solid and household consumption advanced at a robust pace. November’s personal income and spending report, released by the Commerce Department on Friday, showed a 0.4% monthly increase in ... READ MORE >
Fed signals end of rate hikes and projects cuts in 2024
The Federal Reserve signaled at its meeting on Wednesday that it is done raising its policy rate and is poised to reduce it by 75 basis points next year, with more cuts after that. The Fed also reduced its inflation forecast for next year to 2.8% from 3.3%, and to 2.4% from 2.5% for 2025, which ... READ MORE >