The Employment Cost Index—the Federal Reserve's closely watched metric on wage growth—increased by 1.0% in the second quarter, the slowest rate since June 2021, the Bureau of Labor Statistics reported on Friday. That brought the 12-month increase of overall employment compensation down to ... READ MORE >
personal consumption expenditures
U.S. economy was a lot stronger in first quarter, final GDP estimate shows
The U.S. economy was stronger in the first quarter than previous estimates indicated, the Bureau of Economic Analysis reported on Thursday. The third and final estimate of gross domestic product showed a drastic upward revision to a 2.0% gain from 1.3% on a quarterly and annualized basis. The increase ... READ MORE >
Fed’s key gauges of inflation soften in February
Key inflation, spending and income data released on Friday should make the Federal Reserve's so-called dovish rate hike of 25 basis points in March a lot more reasonable by now. It also reaffirmed our call that the end of the hiking cycle is only a couple of months away. While the data ... READ MORE >
January’s spending shows a hot economy despite rate hikes
January’s data on inflation and spending came in hotter than expected on Friday, making the case that the Federal Reserve will need to raise interest rates three more times and bring its peak policy rate to 5.5%. Rising prices and spending indicated that overall demand remained robust, which ... READ MORE >
RSM revises its Fed call as inflation proves sticky
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 >
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 >
Spending holds strong as inflation moderates in October
Overall demand remained robust as holiday shopping kicked off in October, according to data on inflation, spending and income from the Bureau of Economic Analysis released on Thursday. Spending rose by 0.8% while income increased by 0.7%. After adjusting for inflation, real spending rose by 0.5% ... READ MORE >
U.S. October CPI: Inflation still high, but relief on the horizon
Inflation in the U.S. economy is approaching an inflection point where the central bank can begin considering a pause in its efforts to restore price stability and households can begin seeing possible relief from a deterioration in real income. The October consumer price index, which rose by 0.4% ... READ MORE >
Spending grows, even with higher-than-expected inflation
Despite a sharp drop in energy prices, August's personal consumption expenditures price index—the Federal Reserve's key gauge for inflation—rose by 0.3% after falling by 0.1% in July. The price increases ate into spending, bringing spending growth from a 0.4% increase in dollar terms to only a 0.1% ... READ MORE >
How high must unemployment rise to tame inflation?
Restoring price stability is now the paramount policy goal at the Federal Reserve. Chairman Jerome Powell went out of his way on Friday to point out the lessons of the high inflation in the 1970s and 1980s, and the sacrifice it took to wring it out of the economy after years of delays. "Our aim is to ... READ MORE >