A precipitous decline in money supply could be choking the U.S.’s economic recovery, while supporting deflationary fears. While the Fed no longer tracks M3, one of the broadest measures of the U.S. money supply, professional forecasters estimate the index has fallen 9.6% on an annualized basis from February through April; matching what was last seen […]
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Inflation
One year inflation expectations, as tracked by the breakeven rate for U.S. Treasury Inflated Protected Securities (TIPS), have fallen to almost 0%, while the more often quoted two year rate plummeted to 0.7% (see chart). While longer-term inflation expectations have diminished, albeit at a much smaller magnitude, the spread between 2Y and 5Y rates has […]
Rising producer prices eventually translate into higher consumer prices as businesses are forced to pass on a portion if not all of the price increments to their customers. So what you might be asking, this morning’s PPI indicated that producer prices fell -0.1% on a monthly basis. While this is true the PPI is broken […]
Rampant risk aversion, receding energy prices, and a USD rally have led to significant steepening in the short-end of the U.S. breakeven curve, with the potential for more to come ahead of next week’s CPI release (see chart). So long as risks in Europe continue to escalate and CPI growth comes in at or below […]
December’s Industrial Production rose +0.6%, inline with a Bloomberg consensus forecast of +0.6%. November’s release was revised to +0.8% to +0.6%. December’s reading was almost entirely due to a 5.9% jump in utilities stemming from extremely cold weather around the country. The index’s manufacturing component actually fell -0.1% during the month, while mining output rose […]
October’s Housing Starts disappointed the market finishing at an annual rate of 529,000 (-10.6%), while September’s release was revised up to 592K from 590K. Permit’s in October declined -4.0%, to 552K. Single-family starts fell -6.8%, while multi-family homes plummeted by -34.6%. The Bloomberg consensus forecast was for starts at 600K, with forecasts ranging from 570K […]
September Housing Starts finished the month at an annual rate of 590K (+0.5%). At the same time, August Housing Starts were revised down to 587K versus its original release of 598K. Housing permits declined by -1.2%, to 573K. Unlike starts, August permits experienced a modest upward revision to 580K from 579K. Single-family starts rose +3.9%, […]
September’s CPI rose +0.2%, compared to a +0.4% increment a month prior. Core CPI increased +0.2%. This was generally in-line with the Bloomberg consensus forecast. Food prices fell -0.1% during the month while energy prices rose +0.6%. These modest gains continue to indicate that some deflationary risk remains on the table, and inflation should not […]
Personal income rose 0.2% in August, after rising 0.2% in July. Personal consumption expenditures climbed 1.3%, versus a 0.3% increment in July. Most of August’s strength was due to increased durable goods purchases (+5.3) stemming from the residual effect from the US government’s Cash for Clunkers program. Nevertheless, the consumption of services reached an 11 […]
On a monthly basis both the 10 and 20 city Case Shiller HPI came in higher in July at +1.65% and 1.60%, respectively. However, on a yearly basis the 10 city index is still down 12.8%, while the 20 city index is down 13.30%. On a monthly basis only three cities experienced declines (Detroit, Las […]