The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.
- BLS Handbook of Methods
- Bureau of Economic Analysis
- Bureau of Labor Statistics
- Congressional Budget Office
- Economic Data - FRED® II, St. Louis Fed
- Office of Management and Budget
- Statistics: Releases and Historical Data, Board of Governors
- U.S. Census Bureau Economic Programs
- White House Economic Statistics Briefing Room
July 19, 2006
The Chairman Soothes, The Data Don't
Chairman Bernanke did his duty today, and completed his semi-annual discussion, on behalf of the Federal Open Market Committee, with the Senate Committee on Banking, Housing, and Urban Affairs. The market reviews were good. From the AP, via ABC News:
Wall Street shot higher Wednesday after Federal Reserve Chairman Ben Bernanke soothed investors with his view that economic growth seems to be moderating and inflation remains contained. The Dow Jones industrial average gained more than 220 points, while Treasury bonds recovered from early losses to close sharply higher.
Those early losses were due to the now-forgotten news of the day: The CPI report for June was not good, not good at all. Here's the short version:
Find any comfort there? Me neither. But wait. It gets worse. Here is the distribution of price changes (weighted, as usual, by expenditure shares):
So, just over 60 percent of weighted price changes have been rising at a annual pace in excess of 3 percent. And it ain't just energy:
Rent and owner's equivalent rent are certainly implicated...
... but together these components only represent about 30 percent of the CPI market basket.
These inflationary impulses may very well be temporary -- I'm still guessing they are -- but they are very definitely broad based.
UPDATE: Mr. Naybob agrees that the price pressures are broad-based, and implicates energy-price pass-through. But Brad DeLong might disagree with my assessment of the report, advertising the news as "A Slightly, Slightly Unfavorable CPI Report." But The Skeptical Speculator says the news was bad (and does its standard exemplary job of putting things in the context of the broader global context). Mark Thoma notes that the inflation reports are not helping the case for a pause in FOMC rate hikes. The Capital Spectator thinks the answer to whether yesterday's market optimism was warranted "awaits in the enxt CPI report."
On Mr. Bernanke's testimomy, Jim Hamilton views the comments as more optimistic than he expected, and more optimistic than he thinks warranted. Calculated Risk also expresses some skepticism about the Chairman's characterization of the country's economic health (here and here). Toni Straka was disappointed that there was no discussion of the nation's fiscal situation. Stock Trading Update advises that the Bernanke bounce is likely to be short lived.
TrackBack URL for this entry:
Listed below are links to blogs that reference The Chairman Soothes, The Data Don't:
Tracked on Jul 24, 2006 11:36:09 PM
Tracked on Aug 4, 2006 3:02:29 PM
- A Quick Pay Check: Wage Growth of Full-Time and Part-Time Workers
- Back to the '80s, Courtesy of the Wage Growth Tracker
- Introducing the Atlanta Fed's Taylor Rule Utility
- Payroll Employment Growth: Strong Enough?
- Forecasting Loan Losses for Stress Tests
- Men at Work: Are We Seeing a Turnaround in Male Labor Force Participation?
- What’s Moving the Market’s Views on the Path of Short-Term Rates?
- Lockhart Casts a Line into the Murky Waters of Uncertainty
- How Will Employers Respond to New Overtime Regulations?
- How Good Is The Employment Trend? Decide for Yourself
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- November 2015
- Business Cycles
- Business Inflation Expectations
- Capital and Investment
- Capital Markets
- Data Releases
- Economic conditions
- Economic Growth and Development
- Exchange Rates and the Dollar
- Fed Funds Futures
- Federal Debt and Deficits
- Federal Reserve and Monetary Policy
- Financial System
- Fiscal Policy
- Health Care
- Inflation Expectations
- Interest Rates
- Labor Markets
- Latin America/South America
- Monetary Policy
- Money Markets
- Real Estate
- Saving, Capital, and Investment
- Small Business
- Social Security
- This, That, and the Other
- Trade Deficit
- Wage Growth