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
May 11, 2007
Reports I'm Having A Hard Time Getting Excited About
U.S. retail sales are slowing and inflation is under control, two government reports showed today, further reducing any prospect that the Federal Reserve will raise interest rates.
Retail sales unexpectedly dropped 0.2 percent in April after a revised 1 percent gain the prior month, the Commerce Department said today in Washington. At the same time, figures from the Labor Department showed producer prices excluding food and fuel costs were unchanged for a second month.
The sales report adds to concern that a pullback in consumer spending, which accounts for more than two-thirds of the economy, will jeopardize the expansion. Signs of a further slowdown contrast with the Fed's insistence that inflation is the biggest risk and that the economy will likely grow at a "moderate'' pace.
OK, let's try a test. Which one of these months looks unlike the others?
If you picked April 2007 you've a keener eye than I. It's true that the trend in sales growth has not been favorable over the past year...
... but we could have said the same thing had sales growth registered something closer to the 0.4 percent gain expected by forecasters. What's more, if it's trends we are after the year-over-year growth rate of sales excluding motor vehicles and parts has more or less stabilized over the course of the year (after contracting sharply through 2006):
As for the inflation outlook, the emphasis has been on the "core" PPI and not the headline number:
The last time so-called core producer prices went two months without an increase was at the end of 2005. Including food and fuel, prices paid to factories, farmers and other producers rose 0.7 percent after a 1.0 percent gain in March, the Labor Department said.
It may be true that those tame PPI numbers will ultimately translate to lower consumer prices...
... but arguably the PPI report is telling us more about headline CPI, at least in the near term:
The Bloomberg article included this assessment of the situation:
"The economy is really the issue right now, not inflation,'' said Joel Naroff, president of Naroff Economic Advisors in Holland, Pennsylvania...
Unless you held that opinion yesterday, I'm not sure why these reports would lead you to that conclusion today.
TrackBack URL for this entry:
Listed below are links to blogs that reference Reports I'm Having A Hard Time Getting Excited About :
Tracked on May 12, 2007 9:08:11 AM
- GDPNow's Second Quarter Forecast: Is It Too High?
- Are Small Loans Hard to Find? Evidence from the Federal Reserve Banks' Small Business Survey
- Slide into the Economic Driver's Seat with the Labor Market Sliders
- The Fed’s Inflation Goal: What Does the Public Know?
- Going to School on Labor Force Participation
- Bad Debt Is Bad for Your Health
- Working for Yourself, Some of the Time
- Gauging Firm Optimism in a Time of Transition
- Can Tight Labor Markets Inhibit Investment Growth?
- More Ways to Watch Wages
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- 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