Tag Archives: The United States

It is largely irrelevant, but still the political theater is fascinating. As is now standard operating procedure, whatever comes out of the Trump administration immediately is conferred as the standard for awful. This is not my own determination, mind you, but that of the mainstream, whatever that is these days. And so it is with the first set of budget figures that include very robust growth projections, a point of...

Industrial Production in the United States was flat in January 2017, following in December the first positive growth rate in over a year. The monthly estimates for IP are often subject to greater revisions than in other data series, so the figures for the latest month might change in the months ahead. Still, even with that in mind, there is no acceleration indicated for US industry. After suffering through a more than...

After eight years of the regulation-happy Obama administration, the United States has undergone a huge slide into the 17th most economically free country in the world, according to the Heritage Foundation’s 2017 Index of Economic Freedom. Under president Obama, the federal government issued over 600 major regulations, costing the U.S. economy hundreds of millions of dollars. Those regulations were placed on top of...

There are actually two parts to examining the orthodox treatment of the output gap. The first is the review, looking backward to trace how we got to this state. The second is looking forward trying to figure what it means to be here. One final rearward assessment is required so as to frame how we view what comes next. As I suggested earlier this week, the so-called output gap started at the trough of the Great...

Right now there are two conventional propositions behind the “reflation” trade, and in many ways both are highly related if not fully intertwined. The first is that interest rates have nowhere to go but up. The Fed is raising rates again and seems more confident in doing more this year than it wanted to last year. With nominal rates already rising in the last half of 2016, and with more (surveyed) optimism than even...

The Consumer Price Index for January 2017 rose 2.5%, pulled upward by its energy component which thanks to oil prices now being comparing to the absolutely lows last year saw that part of the index rise 11.1% year-over-year. Given that oil prices bottomed out on February 11, 2016, this is the last month where oil prices and thus energy inflation will be at its most extreme (except, of course, should WTI actually rise...

Fragmentation, discord, discontent, class war: this is the inevitable result of a shrinking pie. The politics of the past 70 years was all about horsetrading who got what share of the growing pie: the “pie” being cheap energy, government revenues and consumption, sales and profits. Horsetrading over a growing pie is basically fun. There’s always a little increase left for the losers, so there is a reason for everyone to...

Economic Reports Scorecard The economic data since my last update has improved somewhat. It isn’t across the board and it isn’t huge but it must be acknowledged. As usual though there are positives and negatives, just with a slight emphasis on positive right now. Interestingly, the bond market has not responded to these slightly more positive readings with nominal and real yields almost exactly where they were in the...

Real average weekly earnings for the private sector fell 0.6% year-over-year in January. It was the first contraction since December 2013 and the sharpest since October 2012. The reason for it is very simple; nominal wages remain stubbornly stagnant but now a rising CPI subtracts even more from them. Consumers receive no significant boost to their incomes, but are starting to pay more (in comparative terms) for things...

In the middle of 1919, the United States was beset by a great many imbalances. Having just conducted a wartime economy, almost everything before then had been absorbed by the World War I effort. With fiscal restraint subsumed by national emergency, inflation was the central condition. Given that the Federal Reserve was by then merely a few years old, no one was quite sure what to do about it. Chairman of the Federal...