Fear of increasing inflation in the U.S. appear to be the trigger behind the market volatility of previous weeks. Recent gains in hourly compensation to workers have had analysts measuring the effect of wages on inflation. In turn, analysts began pondering changes in Fed's monetary policy due to the apparent overheating path of the economy; … Continue reading Rent Prices Stickiness and the Latest CPI Data.
The stock market seems to be returning to the old normal of higher levels of volatility. I suggested on Tuesday that former Fed Chairman Alan Greenspan’s comments could have brought back volatility by triggering the Dow Sell-off on Monday, February 5th. As I wrote early in the week, I believe that we should observe some panic manifestation … Continue reading Timorous evidence of “Contagious Effect” after Dow Sell-Off.
The stock market keeps on sending signals of correction as the Dow Jones struggle to rebound from Monday’s 5th of February sell-off. Economic analysts began early in the week to point out to fear of high inflation due to an upward trend in workers compensation. News reports were mostly based on strong beliefs and arguments … Continue reading The Missing Part of the Dow Jones and Stock Market Sell-off Analysis.
The US economy added 228,000 new jobs in November of 2017 and analysts rush to assess the state of the economy as “STRONG.” Although the job reports are indeed good indicators of the performance of the US economy, one should not simplify the job report as the snapshot of the economy that allows for those … Continue reading The overuse of the word “Strong” in economic news.
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The series of documents published by the White House Council of Economic Advisers indicate that President Donald Trump’s Tax Reform will end up being his economic growth policy. The most persuasive pitch behind the corporate tax cut is that lowering taxes to corporations will foster economic investment thereby economic growth. Further, the political rhetoric refers … Continue reading Raising economic expectations with the “after-tax” reckon: President Trump’s corporate tax cut plan.
One month of weak payroll data does not make a crisis. The US economy appears to have added only 160,000 new jobs during the month of April in 2016, the Bureau of Labor Statistics reported on Friday. A similar number was published earlier in that week by the payroll firm ADP. Although the slowdown in … Continue reading U.S. economic slowdown? Look at Real Estate labor market.
Although the Federal Open Market Committee (hereafter FOMC) March’s meeting on monetary policy focused on what apparently was a disagreement over the timing for modifying the Federal Bonds interest rates, the minutes indicate that the disagreement is not only on timing issues but also on exchange rate challenges. Not only does the Fed struggle with … Continue reading Unemployment √. Inflation √. So… what is the Fed worrying about?
Low prices of gas and oil are creating a reallocation of wealth not seen very often in capitalism. The recent version of the Beige Book from the Federal Reserve Bank gives some clues about the way this phenomenon is evolving. This short article looks at the winners and losers of the current oil story. Labor … Continue reading Low price of oil: some winners and losers.
The puzzling aspect of recent data on inflation has been the deflation trajectory forged by oil prices. The index on energy by itself has fallen 28.7 percent over the year. Just in January 2016, the energy index declined 2.8 percent as gasoline index did so by 4.8 percent during the same month. The energy index … Continue reading A set of possible negative US economic shocks.