Deeper Analysis

Comment on Inflation

April 9, 2019

The current U.S. economic upswing is just three months short of setting a new record for longevity, and yet inflation remains stubbornly below the Federal Reserve’s target. Just as it proved frustratingly hard to lower inflation sustainably during the last third of the twentieth century, policymakers in the United States, Japan, and Europe have grappled […] More

U.S. Factory Sector Advantage Versus Euroland Widened Sharply in March

April 1, 2019

The 7.8-point spread in March between the U.S. ISM-compiled manufacturing purchasing managers index and the euro area IHS-compiled counterpart is the widest such has been in over six years and 4.9 index points greater than the width at the end of 2018. There is a caveat, however, and it is the a 0.6-point decline in […] More

March and First Quarter 2019 in Figures

March 30, 2019

The table below documents changes in key market variables during March and the first quarter of 2019. Sharply reduced sovereign debt yields in both time intervals amidst slowing global growth and lessening inflation were a driving force behind other markets as well. Equities benefited but not nearly as much in March when the U.S. yield […] More

Comment on Revised U.S. GDP

March 28, 2019

U.S. quarterly GDP growth in the final quarter of 2018 got revised downward by 0.4 percentage points to 2.2% annualized. Despite the positive spin from government officials, that’s below the average 2.7% per annum pace of the whole Trump presidency thus far. Moreover, personal consumption, which comprises about 70% of GDP, contributed disproportionately by accounting […] More

One Problem with the Fed Letting Its Interest Rate Crest at 2.5%

March 26, 2019

Share prices are rallying today in part on hopes that the Federal Reserve has reacted quickly to a deterioration in the outlook for global and U.S. growth. By doing so, maybe the inversion of the U.S. yield curve that recently occurred will be the exception that doesn’t herald a U.S. recession within 18 months. I […] More

U.S. Manufacturing Conditions Grew Significantly more Slowly in February, Narrowing Edge Versus Euroland

March 1, 2019

The ISM-compiled U.S. manufacturing purchasing managers index declined 2.4 index points to 54.2, a 27-month low. That was twice as large as the 1.2-point drop in the IHS-compiled euro area manufacturing PMI to a 68-month low of 49.3. As a result, the differential between the two data series narrowed by 1.2 points to 4.9, as […] More

February in Figures

February 28, 2019

Sterling and the dollar strengthened during February. Ten-year sovereign debt yields rose slightly more sharply in the month than their counterparts in the other countries featured in the table below, but none of the central bank rates among them were changed. Equities in most of the places continued to recover, although not as much as […] More


February 28, 2019

U.S. real GDP expanded 2.6% at a seasonally adjusted annual rate last quarter, down from 3.4% in 3Q and 4.2% in the second quarter of 2018. Personal consumption and nonresidential investment accounted for all of the rise. Residential construction recorded a fourth straight contraction. Net exports exerted a smaller drag of 0.2 percentage points. Inventories […] More

Powell’s Humphrey Hawkins Testimony

February 26, 2019

Fed Chairman Powell statement before the Senate Banking Committee presents a decent baseline view of the U.S. economy, observing a strong labor market and projecting inflation around the 2% target once some transitory depressants pass. However, the following two paragraphs lay out a number of undesirable short-term and longer run developments that ought to be […] More

U.S. Nonmanufacturing PMI and Euroland Service Sector PMI

February 5, 2019

Service sector growth slowed last month but remained positive in both the United States and the euro area. The ISM-compiled non-manufacturing PMI fell 1.3 points, while the IHS-compiled Ezone services PMI dropped by 1.0 point. The differential between those two data series narrowed slightly but remained significantly U.S.-advantageous at +6.6 points. The U.S. advantage in […] More