Search results

From a just-published article in Foreign Affairs: The story of the dollar is, ultimately, less about the United States' strength than about the rest of the world's weaknesses. Until that disparity changes, and seemingly no matter how badly the United States plays its cards, don't expect the dollar to decline. A summary graph: Eswar Prasad […]

The CBO released an updated Economic Outlook yesterday. Projected PCE inflation is higher, as are budget deficits. First drop in Fed funds rate in 2025Q1. For me, most interesting are the GDP projections, including with respect to potential GDP. Here's the GDP projection as of June, and as of February. Figure 1: GDP as reported […]

Industrial production surprises on upside (0.9% vs. 0.3% m/m), while nominal retail sales increase modestly (0.1 actual vs. 0.3% consensus). Figure 1: Nonfarm Payroll (NFP) employment from CES (bold blue), civilian employment (orange), industrial production (red), personal income excluding current transfers in Ch.2017$ (bold green), manufacturing and trade sales in Ch.2017$ (black), consumption in Ch.2017$ (light […]

Today, we present a guest post written by David Papell and Ruxandra Prodan-Boul, Professor of Economics at the University of Houston and Economics Lecturer at Stanford University. The Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate (FFR) at 5.25 – 5.5 percent in its June 2024 meeting and, in […]

With the release of the Philadelphia Fed early benchmark, we have the following 12 month changes in employment (000's) from different sources: From April 2023 to April 2024, according to the Philadelphia Fed early benchmark nonfarm payroll employment grew only 2.4 mn rather than 2.8 mn as reported by CES. Figure 1: Nonfarm payroll employment […]

Conventional and Instantaneous The unweighted average of unemployment rate and inflation rate is ad hoc. Here's the conventional using y/y CPI: Figure 1: Unemployment rate (blue bar) and y/y CPI inflation (tan bar), in %. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, NBER, and author's calculations. The use of y/y inflation is arbitrary. […]

Just heard Wilbur Ross say on Bloomberg (roughly 3:35 ET) "The President was serious about fixing the balance of payments problem of the US". I laughed and laughed and laughed. Maybe he was determined, but he had, like Peter Navarro, no clue about how to do it. Here's the US trade balance defined using NIPA […]

On Zoom, presentation by Joshua Aizenman of paper coauthored with Bada Han, Rashad Ahmed, and Yothin Jinjarak. Séminaire Cournot – Joshua Aizenman (U. Southern California) – Beta (beta-economics.fr) (Thursday, 6/14 – 2pm French time, 8am ET if my math is correct) Paper is here.

Core PPI under consensus (0% vs. +0.3% m/m). Figure 1: Instantaneous inflation (T=12, a=4) per Eeckhout (2023) for core CPI (blue), chained core CPI, seasonally adjusted by author using X-13 (tan), PCE deflator (pink), CPI supercore (teal), PPI core (light green). Source: BLS, BEA via FRED, BLS, and author's calculations. Here's a detail. Figure 2: Instantaneous inflation […]

Doing a great imitation of Neville Chamberlain. Source: Aaronson (2024). Don't have a transcript, but here are excerpts from Senator Theoden's website. * Théoden Reference is to reign during period of Grima's tenure as security adviser. For more on Senator Theoden, see this post.

Following up on the PPI release (discussed along with other core measures) discussed here, how have markets responded, in terms of Fed funds futures, the ten year rate? Source: CME accessed 6/12, 6/13/2024, 1:30pm CT. The trajectory of Fed funds implied by futures is further depressed. The ten year yield also dropped. In perspective: Source: TradingEconomics, accessed […]

All have a positive gradient in Q1. Figure 1: GDP (bold black), GDO (tan), and GDP+ (sky blue), all in bn.Ch.2017$ SAAR. GDP, GDO based on 2nd release. Small % at right are Q1 SAAR growth rates. Source: BEA, Philadelphia Fed, author's calculations. Note that GDO for 2023Q4 is revised down, while my estimate for […]

Headline and core surprise on the downside: m/m 0.2% vs. 0.3% consensus, and 0.0% vs 0.1% consensus, respectively. More interestingly, Cleveland Fed core CPI nowcast for May m/m was 0.30%, actual was 0.16%. First, a comparison of different measures of headline – y/y, instantaneous, m/m: Figure 1: Year-on-Year CPI inflation (bold black), instantaneous inflation (T=12, […]

Here's a picture of the Fed funds pre- and post-CPI release/FOMC SEP: Source: CME accessed 6/12/2024, 1:30pm. Before the news, the implied drop over 2024 was 35 bps, now 39 bps. How many drops? Using modal probabilities: Source: CME accessed 6/12/2024, 1:30pm. Two 25 bps drops before, two drops after the news. Current commentary […]

The survey indicates 2.0% median growth q4/q4, not far from June SEP at 2.1% (unchanged from March). Figure 1: GDP (bold black), May Survey of Professional Forecasters median (blue), FT-Booth School implied (tan square), Survey of Economic Projections/FOMC June median implied (light green x), GDPNow of 7 Jun implied (sky blue square), all in bn.Ch.2017$ […]