Tag

core inflation Archives - Shopfloor

The Federal Reserve Hiked Short-Term Rates Again as Expected, Signaled Four Increases in 2018

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

As expected, the Federal Open Market Committee (FOMC) ended its June 12–13 meeting by hiking short-term rates by 25 basis points. This action—the second increase so far in 2018—was widely expected, with markets already pricing it in. More importantly, the Federal Reserve’s economic projections signal that there could be four hikes in the federal funds rate this year, up from a consensus estimate of around three. With the Federal Reserve’s action, the target range for the federal funds rate is now 1.75 to 2 percent. The projections show that range rising to 2.4 percent by the end of 2018 and 3.1 percent in 2019. The latter would indicate three hikes next year. With that said, the FOMC will hinge future interest rate increases on incoming data. Read More

Producer Prices for Final Demand Goods Slowed in February, but Up 2.9 Percent Over the Past 12 Months

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics reported that producer prices for final demand goods and services rose 0.2 percent in February, easing somewhat from the 0.4 percent gain in January. For manufacturers, producer prices for final demand goods edged down 0.1 percent in February, pulling back from the 0.7 percent increase in January. Energy costs helped to boost January’s jump in input costs, with energy prices up 3.4 percent in that release; in the latest figures, energy fell 0.5 percent. Food prices declined 0.4 percent, drifting lower for the third straight month. On a year-over-year basis, final demand food and energy costs have risen 0.6 percent and 9.3 percent, respectively. Excluding food and energy, producer prices for final demand goods rose 0.2 percent in this report, increasing for the seventh consecutive month.   Read More

Consumer Prices Up 0.2 Percent in February, or 2.3 Percent Over the Past 12 Months

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics reported that consumer prices increased 0.2 percent in February, slowing from a robust 0.5 percent gain in January. Food and energy costs decelerated in the latest data, with the latter being one of the bigger drivers of higher consumer prices in the prior release. Energy costs inched up 0.1 percent in February, slowing after a rise of 3.0 percent in January, with gasoline prices off 0.9 percent. This is largely consistent with data from the Energy Information Administration, which pegged the average price for regular conventional gasoline at $2.516 per gallon on January 29 but fell to $2.442 a gallon on February 26. At the same time, food prices were flat in February. Since February 2017, food and energy costs have increased 1.4 percent and 7.7 percent, respectively. Read More

Producer Prices for Final Demand Goods Jumped 0.7 Percent in January on Higher Energy Costs

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics said that producer prices for final demand goods and services rose 0.4 percent in January, bouncing back after being unchanged in December. For manufacturers, producer prices for final demand goods jumped 0.7 percent in January, its fastest pace in two months. This was led by sharply higher energy costs, which were up 3.4 percent in January. This was largely consistent with recent observations in the spot price for West Texas intermediate (WTI) crude oil, which increased from an average of $57.88 in December to $63.70 in January, its highest monthly average since November 2014. Read More

Personal Spending Was Up Strongly in December, with Lowest Saving Rate Since September 2005

By | Economy, Shopfloor Economics | No Comments

The Bureau of Economic Analysis said that personal spending was up 0.4 percent in December, extending the robust 0.8 percent gain seen in November. Americans have continued to increase their purchasing, making personal consumption expenditures one of the bright spots in the U.S. economy. Over the past 12 months, personal spending has risen by 4.6 percent, off just slightly from the 4.7 percent pace observed in the prior report. In December, durable goods spending increased by 0.7 percent, but nondurable goods were off by 0.2 percent. On a year-over-year basis, goods spending for durable and nondurable goods were increased at very healthy rates, up 5.5 percent and 4.7 percent, respectively, since December 2016.

Likewise, the savings rate fell to its lowest rate since September 2005, down from 2.5 percent in November to 2.4 percent in December. The savings rate has trended lower since peaking at 4.1 percent in February. It is yet another illustration that Americans have accelerated their purchasing—something helped to boost holiday spending and provide a significant boost to real GDP growth in the fourth quarter.   Read More

Reduced Energy Costs Keep Consumer Price Inflation in December in Check

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics reported that consumer prices edged up 0.1 percent in December, slowing from the 0.4 percent gain in November. Reduced energy costs, which declined 1.2 percent for the month, helped to keep consumer inflation in check in December, with gasoline prices off 2.7 percent. This is largely consistent with data from the Energy Information Administration, which pegged the average price for regular conventional gasoline at $2.47 per gallon on November 6, falling to $2.36 a gallon on December 25. (Note that costs have risen since then, averaging $2.43 per gallon on January 8.) In contrast, food prices rose 0.2 percent in December. Since December 2016, food and energy costs have increased 1.6 percent and 6.9 percent, respectively. Read More

Producer Prices Inched Down 0.1 Percent in December, with Modest 2.2 Percent Year-Over-Year Core Inflation

By | Economy, Shopfloor Economics | No Comments

The Bureau of Labor Statistics said that producer prices for final demand goods and services inched down 0.1 percent in December, declining for the first time since August 2016. For manufacturers, producer prices for final demand goods were unchanged in December, pausing after jumping 1.0 percent in November. More than anything, this reflected flatness in energy prices, which had increased by 4.6 percent in the prior report. This was largely consistent with recent observations in the spot price for West Texas intermediate (WTI) crude oil, which increased from an average of $51.58 in October to $56.64 in November to $57.88 in December. (Note that WTI prices have increased significantly since then, with a spot price of $64.45 this morning.)

Meanwhile, food prices were off by 0.7 percent in December. On a year-over-year basis, final demand food and energy costs have risen 1.9 percent and 10.3 percent, respectively. Excluding food and energy, producer prices for final demand goods were up by 0.2 percent in December, increasing for the fifth consecutive month.   Read More

Personal Spending Was Up Strongly in November, with Savings Rate Down to a 10-Year Low

By | Economy, Shopfloor Main | No Comments

The Bureau of Economic Analysis said that personal spending was up strongly in November, up 0.6 percent. After increasing by just 0.2 percent in October, Americans accelerated their personal consumption expenditures in November, including a rebound in nondurable goods spending, up 1.2 percent. Durable goods spending was unchanged in the latest data. Overall, consumer spending has been one of the bright spots in the U.S. economy, with the public more willing to open their pocketbooks over the course of this year. Indeed, personal spending has increased 4.5 percent over the past 12 months, up from 4.2 percent in the previous release and the best year-over-year rate since April. In addition, goods spending for durable and nondurable goods were up 5.4 percent and 5.0 percent year-over-year, respectively.

Likewise, the savings rate has fallen to a 10-year low, down from 3.2 percent in October to 2.9 percent in November. This was a level not seen in the data since November 2007. It is yet another illustration that Americans have accelerated their purchasing—something that is likely to help boost overall holiday spending this year. Read More

Personal Spending Growth Was Modest in October, Extending the Robust Gain from September

By | Economy, Shopfloor Economics | No Comments

The Bureau of Economic Analysis said that personal spending rose modestly in October, up 0.3 percent. As such, the latest increase in personal consumption expenditures extended the robust 0.9 percent gain seen in September, which was the fastest monthly pace since August 2009. In October, the goods spending data were mixed, with nondurable goods purchases up by 0.2 percent but with durable goods outlays edging down by 0.1 percent. With that said, the longer-term picture remains favorable, as Americans have continued to spend at relatively healthy rates overall. Indeed, personal spending has increased 4.2 percent over the past 12 months, off slightly from 4.3 percent year-over-year in the previous release. In addition, goods spending for durable and nondurable goods were up 3.8 percent and 4.2 percent year-over-year, respectively.

Likewise, the savings rate has fallen from 4.1 percent in October 2016 to 3.2 percent in the current data, highlighting the degree to which Americans have become more willing to spend. At the same time, the savings rate did increase from 3.0 percent in September, largely on stronger income growth. Read More

Share