CERF Blog
Recent data releases show that Core inflation as measured by the Consumer Price Index, excluding food and energy, has been falling rapidly for 4 months now. This is despite recently strong real consumption growth and despite the overall Consumer Price Index holding steady, see chart nearby. Usually, at least in the past ten years, if… Read more
Recent data from the American Association of Railroads on United States and Canadian Railroad Traffic shows gains in April measured on a year-on-year basis. United States April rail carloads were up 15.8 percent from April 2009 and Canadian April rail carloads were up 26.7 percent from April 2009. While the carload levels are still nowhere… Read more
The question has merit, but I came to it by a roundabout process. I was thinking about how our savings rate is low and falling. After all, we have lots of reasons to save: We’ve lost huge amounts of wealth over the past couple of years, and many people, especially Baby Boomers anticipating retirement, are… Read more
April non-farm jobs rose by 290 thousand, greater than the consensus estimate of 200 thousand. This was an improvement over 230 thousand in March and 39 thousand in February, which were revised up from original press releases. At this rate of job improvement, year-on-year job growth will become positive in July, a welcome event indeed.… Read more
Recent data releases show that inflation remains well contained. In fact, by one key measure, inflation is at a historical low, causing increasing concern about deflation. From the March Consumer Price Index press release we see that first quarter overall price levels have grown about 2.3 percent from 2009 quarter 1. This measure includes energy… Read more
United States Gross Domestic Product expanded at a 3.2 percent pace in quarter one of 2010, according to the preliminary estimate released today. This was very close to our forecast of 3.1 percent. This expansion was the result of 3.6% growth in personal consumption expenditures and a $50 billion increase in real private inventory spending,… Read more
New durables-manufactured goods orders fell 1.3 percent in March, but excluding transportation, orders rose 2.8 percent. The overall drop was driven by a large decline in aircraft orders. The aircraft orders are volatile and not driven as much by overall economic trends. These results are consistent with our March forecast where we projected relatively strong… Read more
United States retail sales data through February show that while the last three months have been positive they have not in fact been inspiring at all. We see that the volatility in total sales was driven by the motor vehicle and motor vehicle parts market during August, September, and October of 2009. I attribute this… Read more
Corporate bond spreads are returning to normal levels. The first chart below shows that the monthly spread between Baa bonds and Aaa bonds are close to what they were back in 2007 before the 2008 crisis. This is good because the rate on Baa bonds is declining. This indicates that the perceived risk in lower… Read more
It has been 57 years since Milton Friedman wrote his paper “The Case for Flexible Exchange Rates” where he argued that the benefits from a market economy and a free trade system would be enhanced by flexible exchange rates. This implied a freely floating dollar, whose value was to be determined by the buying and… Read more
