Core PCE

The Next Recession Could Be In 2019

By
By

With Q2 S&P 500 earnings growth at 26.58%, core PCE inflation only at 2%, and small business optimism at the highest level in the 45 year history of the NFIB survey, there’s not much reason to be bearish on equities in the intermediate term. The biggest concern in the next…CONTINUE READING

Link Between Inflation & Output Gap

By
By

The output gap is the highest since the 1970s suggesting that inflation should be significantly increasing in the coming years. However, can the two indicators both be correct, with there being subdued inflation as measured currently and with the economy above its potential?

CONTINUE READING

Is Real Fed Funds Rate Peaking?

By
By

Q2 GDP growth was revised higher from 4.1% to 4.2% even though the estimate for real consumption growth was revised lower from 4% to 3.8%. That being said, the consumer had a strong rebound from Q1 and still drove GDP growth to an amazing result. The obvious question is whether…CONTINUE READING

What Amount of Inflation Is Good?

By
By

The way you interpret the economic data released in the PCE and ECI reports depends on if you fear inflation or an economic slowdown more. It’s not an easy decision to make because on the one hand, the labor market is tightening and the cycle is probably near its end.…CONTINUE READING

Savings Rate Implication For Next Downturn

By
By

Q2 GDP growth was impressive. In fact, the report was so good that the main criticism it is receiving is whether the economy can maintain this pace. The ECRI leading index doesn’t anticipate for this pace to be maintained because it is forecasting a slowdown. Obviously, that’s only one indicator,…CONTINUE READING

Consumer Prices Rise Highest Since 2007

By
By

One of the major trends of 2018 is likely to be the acceleration of inflation growth, as we have discussed previously in the following articles: Why Inflation Will Increase In 2018 Long-Term Inflation Pressures The Fed has longed for inflation for years because it consistently has been below its goal…CONTINUE READING