Consumer

Live Long And Prosper!

Apr 8, 2024 2 min read

American consumers are doing what they do best: They are consuming goods and services. Their consumption of services has been especially strong. So the demand for workers by several major services industries has been particularly strong. In turn, robust employment gains have boosted consumers’ purchasing power and spending. We have attributed some of these developments to the retiring Baby Boomer generation. This cohort is the richest generation of senior citizens

Ed Yardeni

Rolling Recoveries In Manufacturing & Retailing

Apr 1, 2024 2 min read paid

The rolling recessions in manufacturing and retailing are turning into rolling recoveries. That's our conclusion based on today's relatively solid manufacturing purchasing managers report for March. The M-PMI rose to 50.3, the first reading above 50.0 since September 2022 (chart). That was the beginning of the rolling recession that hit goods producers following the post-lockdown goods buying binge that started May 2020. The new

Ed Yardeni

It Was Cold In January, But Spring Is Coming!

Feb 15, 2024 2 min read

Retail sales fell 0.8% m/m in January, much weaker than expected (chart). Leading the way down was a 4.1% drop in building materials & garden equipment & supplies. Following the release of January's employment report, we anticipated some weakness in retail sales because the 0.2% increase in payrolls was offset by an odd 0.6% drop in average weekly hours (chart). Also weak during

Ed Yardeni

What Is Powell Thinking?

Jan 17, 2024 3 min read paid

This question was partially answered yesterday in a speech by Fed Governor Christopher Waller: "This cycle, however, with economic activity and labor markets in good shape and inflation coming down gradually to 2 percent, I see no reason to move as quickly or cut as rapidly as in the past. The healthy state of the economy provides the flexibility to lower the (nominal) policy rate to keep the real

Ed Yardeni

The Economic Week Ahead: December 18 - 22

Dec 17, 2023 2 min read paid

On Wednesday, at his presser, Fed Chair Jerome Powell sounded more dovish. So bond and stock prices continued to rally on expectations that the Fed might cut the federal funds rate three times in 2024 by 75bps in total. On Friday, NY Fed President John Williams pushed back by saying, "We aren't really talking about rate cuts right now." More Fed officials will weigh in on

Ed Yardeni

Another Bowl Of Mixed Nuts

Dec 7, 2023 2 min read

The S&P 500 is consolidating its gains since the October 27 bottom. In recent days, its been trading between 4550 and 4600 (chart). Investors are trying to ascertain which way the economy is headed in 2024. We remain in the soft landing camp. Today's data continued to show that consumers have jobs. However, the latest reading on consumer credit borrowing was weak. Consider the following: (1)

Ed Yardeni

Inflation Cooling

Nov 30, 2023 2 min read paid

Stocks rallied today as October's PCED inflation rate continued to moderate. Most importantly, the inflation rate of PCED services excluding energy and housing is falling. It has been stuck around 5.0% in 2022 and earlier this year. But it was down to 3.9% y/y in October (chart). Fed Chair Jerome Powell and his colleagues have said that they are concerned about the stickiness of this

Ed Yardeni

Fed Not Even Thinking About Thinking About Cutting Rates

Nov 21, 2023 2 min read paid

That's the basic message of the FOMC's minutes released today. The word "restrictive" was mentioned seven times mostly in the following context: "In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time." The core PCED was up

Ed Yardeni

Taking A Well-Deserved Break

Nov 15, 2023 2 min read paid

Today was a day of rest in the bond and stock markets. They didn't do much. Perhaps the markets will consolidate their gains since the start of the month through the end of Thanksgiving week. Then we expect that the stock market's Santa Claus rally will resume through the end of the year. In our opinion, the consensus outlook has turned much less pessimistic so far

Ed Yardeni

Pumping More Oil & Less Gasoline

Nov 13, 2023 2 min read

Fed officials often have said that they want to make sure that inflation is “well anchored.” In other words, they want to see that inflationary expectations are low. So it was a bit unsettling that Friday’s release of the consumer sentiment survey for the first half of November showed the one-year expected inflation rate jumped from 3.2% in September to 4.2% in October and 4.4% in

Ed Yardeni

Good News Is Bad News

Oct 17, 2023 2 min read paid

Today's September reports for retail sales and industrial production were better than expected. The Atlanta Fed's GDPNow tracking model shows real GDP grew 5.4% (saar) during Q3, up from 5.1% on October 10. Leading the estimate higher is real consumer spending with a 4.1% increase (table). That's good news for the stock market. It confirms our forecast that S&P

Ed Yardeni

Action Packed Week

Sep 14, 2023 2 min read paid

It certainly has been an action-packed week so far, and there is still Friday to go. Today, the ECB raised its official interest rates by 25bps; the People’s Bank of China lowered the reserve requirement ratio for most banks by 25 basis points; and, the price of oil continued to increase. Yesterday's headline CPI and today's headline PPI inflation rates for August were boosted by

Ed Yardeni

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