Economy

The Economic Week Ahead 6/27/22

Jun 25, 2022 2 min read

The week ahead is jam packed with June regional and national economic surveys. They are likely to confirm that we live in stagflationary times. Key consumer indicators are likely to show that Americans are spending less on goods, more on services, and much more on everything because of inflation. More specifically: (1) Among the biggies will be the national M-PMI on Friday, which is the first day of July. It

Ed Yardeni

The Economic Week Ahead 6/21/22

Jun 20, 2022 1 min read

The week ahead is a short one for the financial markets, and it is a light one for US economic indicators. But that doesn’t mean it will be a quiet week for the markets, since we live in volatile times. May data for existing home sales (to be released on Tuesday) and new home sales (on Friday) are likely to show that the housing market is falling deeper into

Ed Yardeni

US Production and LEI Signaling Softish Landing

Jun 17, 2022 2 min read paid

There was a tiny hint of a manufacturing recession in May's industrial production index, which was reported today. It is one of the four components of the Index of Coincident Economic indicators (CEI). May's Index of Leading Economic Indicators (LEI), also reported today, is signaling slower economic growth ahead as well: (1) The LEI, which remains near its recent record high, fell in May by 0.

Ed Yardeni

Two Regional Business Surveys Showing More Stagflation In June

Jun 16, 2022 2 min read paid

Two regional business surveys, conducted by five of the 12 Federal Reserve Banks, are now available for the New York and Philadelphia districts through June. These two always come out before the other three for Kansas City, Richmond, and Dallas. They also tend to reflect the average final results of all five surveys. The averages of both the two surveys and all five of them closely track the national manufacturing

Ed Yardeni

May's Retail Sales Depressed Q2's Real GDP

Jun 16, 2022 2 min read

May's retail sales was weak in current dollars (-0.3% m/m) and even weaker in real dollars (-1.6%). The question is whether consumers have more than satisfied their post-lockdown, pent-up demand for goods, and are now spending more on services? Consider the following: (1) The three rounds of stimulus checks provided by Uncle Sam (actually Uncles Don and Joe) during the pandemic certainly stimulated retail sales.

Ed Yardeni

Small Business Owners Depressed But Still Hiring

Jun 14, 2022 1 min read

Inflation is depressing, and it is depressing everyone—including consumers, business people, and investors in stocks and bonds. For example, consider May’s survey of small business owners conducted by the National Federation of Independent Business (NFIB): (1) Owners expecting better business conditions over the next six months decreased four points to a net negative 54%, the lowest level recorded in the history of the 48-year-old survey! (2) Inflation was

Ed Yardeni

Uncle Sam Isn’t Santa Claus

Jun 12, 2022 1 min read

Following Friday’s CPI shocker, the financial media seem to have concluded that the Fed will have no choice but to raise the federal funds rate faster than planned to bring inflation down—causing a recession. The Fed is now expected to raise the federal funds rate on Wednesday by 75bps rather than 50bps. The two-year Treasury note soared 23bps on Friday to 3.06%, implying investor expectations that the

Ed Yardeni

The Economic Week Ahead 6/13/22

Jun 11, 2022 1 min read paid

A whole bunch of economic indicators to be released this coming week are likely to confirm that the economy is struggling with stagflation—i.e., high inflation with slow economic growth: (1) On the inflation front, May’s PPI will be out on Tuesday. That same day, the NFIB survey of small business owners will include data on the percentage raising their prices last month. The same goes for June’

Ed Yardeni

Protracted Inflation

Jun 10, 2022 2 min read

Inflation is no longer transitory or persistent. It is protracted. The headline and core CPI inflation rates have yet to peak because rapidly rising energy prices continue to put upward pressure on the headline rate directly and on the core rate indirectly by boosting energy-related costs like transportation. The headline and core rates for May were 8.6% y/y and 6.0% y/y. Here are a few quick

Ed Yardeni

Mortgage Applications Falling, Consumer Credit Balances Rising

Jun 8, 2022 1 min read paid

The housing market may be falling into a recession, but consumers continue to spend—though they have needed to borrow more to do so. The seasonally adjusted purchase Index for mortgage applications, compiled by the Mortgage Bankers Association, decreased 7% w/w and 21% y/y during the week ended June 3. Record-high home prices combined with this year’s spike in the mortgage rate to 5.40% have clobbered

Ed Yardeni

Leading Indicators Up, GDP Revision Down

Jun 7, 2022 2 min read paid

We have a mix of good and bad news this morning for you. We will start with the good news: Two of our favorite leading economic indicators—i.e., payroll employment in truck transportation and in temporary help services—rose to new record highs during May, according to Friday’s employment report (charts below). Both are highly correlated with the Index of Leading Economic Indicators, which is available through April.

Ed Yardeni

The Economic Week Ahead 6/6/2022

Jun 4, 2022 1 min read

On June 1, JPMorgan Chase CEO Jamie Dimon said that “fiscal stimulation is still in the pocketbooks of consumers. They are spending it.” We agree: Consumers have about $1 trillion in excess saving thanks to the government’s pandemic relief checks that weren’t spent. They’ve been dipping into that pool of money to offset the weakness in the purchasing power of their paychecks, which have been eroded by

Ed Yardeni

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