Inflation

Inflation Expectations Falling Fast Along With Pump Price

Sep 12, 2022 1 min read

We believe that it is the pump price of gasoline prominently posted daily at every service station in America that has the most immediate and largest effect on inflationary expectations. It soared earlier this year and so did inflationary expectations, which fell sharply during July and August along with gasoline prices (chart below). August's CPI is out tomorrow morning and is expected to be down 0.1% m/

Ed Yardeni

Divine Disinflation In NM-PMI Survey

Sep 6, 2022 1 min read

Investors are rooting for "divine disinflation." We all want inflation to come down without a painful recession. We want the Fed to tighten one more time by 75bps and then to pause for a while. This morning's release of August's survey of non-manufacturing purchasing managers was consistent with this wishful thinking. That might explain why the S&P 500 rallied after the report

Ed Yardeni

Peak Freight Rates As US Keeps On Trucking?

Sep 5, 2022 1 min read paid

US freight rates increased 28% y/y during July, but declined almost 2% m/m. That's according to the July Cass Freight report We expect that August's report, out in mid-September, will confirm that freight rates have peaked just as peak shipping season encompassing both back-to-school and the holidays begins.

Ed Yardeni

Fed Wants To See Fewer Help Wanted Signs

Aug 30, 2022 1 min read paid

The S&P 500 fell just below its 50-day moving average today partly because the labor market remains hot. July's JOLTS report showed that there were 11.2 million job openings for 5.7 million of the unemployed (chart below). In addition, the Consumer Confidence Index (CCI) rebounded slightly from July's low as only 11.4% of CCI survey respondents said jobs are hard to

Ed Yardeni

August's CPI Likely to Confirm Inflation Peaking

Aug 30, 2022 1 min read

August's CPI report will be released on September 13. It is likely to show that inflation is continuing to moderate. We know that the pump price of gasoline fell sharply this month (chart below). We also know that the wholesale price of used cars fell during August, suggesting that the CPI for used cars fell this month (chart below). These two components of the CPI were among the

Ed Yardeni

Powell's Fugetaboutit Speech

Aug 27, 2022 1 min read

Fed Chair Jerome Powell did pivot on Friday morning at Jackson Hole in his 8-minute speech on the outlook for monetary policy. He turned much more hawkish than the financial markets expected. In his short talk, he managed to walk back any hint of dovishness he might have conveyed during his previous public appearance in a press conference on July 27. Back then, his often ambiguous off-the-cuff responses to reporters

Ed Yardeni

NY & Philly Surveys: Weakening Business & Prices

Aug 18, 2022 1 min read

We now have two of the five regional business surveys conducted during August by the Federal Reserve district banks of NY and Philly: (1) NY was very weak, while Philly offset some of that weakness. The average of the two composites of business activity fell in August to -12.6, the lowest reading since the 2020 rebound from the lockdown recession. Collectively they suggest that August's M-PMI might

Ed Yardeni

Watching The Pump Price

Aug 12, 2022 1 min read

Everyone who drives a car or rides in one knows the price of gasoline on a daily basis. The sharp drop in this price during July fueled the rally in the stock and bond markets as investors concluded that it would help to moderate July's CPI and PPI, which it did as expected over the past two days. We will be watching this price along with everyone else

Ed Yardeni

Hooray: Inflation Cooled Off In July!

Aug 10, 2022 1 min read

July's headline and core CPI inflation rates were lower than expected at 0.0% and 0.3% (table below). The y/y rates were down to 8.5% and 5.9% below recent peaks of 9.1% (in June) and 6.5% in March). That's consistent with our view that inflation is peaking, but remains too high. So we expect that the Fed will hike the

Ed Yardeni

Mixed Inflation Indicators

Aug 9, 2022 1 min read

Today we learned that July's survey of small business owners showed that inflation might have peaked. On the other hand, there was no peak in today's productivity and unit labor costs report for Q2: (1) The small business owners survey found that 56% of them are raising prices, while 37.0% are planning to do so. Both are down from their peaks earlier this year. However,

Ed Yardeni

Inflation Expectations Looking Peakish

Aug 8, 2022 1 min read

July's survey of consumer expectations (SCE), conducted by the Federal Reserve Bank of NY, had some good news for Fed Chair Jerome Powell and the financial markets too: (1) Median one- and three-year-ahead inflation expectations both declined sharply in July, from 6.8% and 3.6% in June to 6.2% and 3.2%, respectively. The press release noted: "Both decreases were broad-based across income groups, but

Ed Yardeni

The Economic Week Ahead, August 8-12

Aug 7, 2022 1 min read

It's a big week for inflation indicators. The fun starts on Monday, when the FRB-NY releases its July survey of consumer expectations for inflation over the next 12 months and 36 months. Falling gasoline prices last month might have reduced expectations for inflation a bit. Then on Tuesday, Q2's productivity and labor costs release is likely to show another big drop in the former and sharp

Ed Yardeni

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