The end of 2018 witnessed very large volatility in stocks and formally put the economy in Bear Market territory - a collapse in stock prices by at least 20% from their prior peak - so the usual question kept cropping up, are we in danger of a recession? The reason though behind the Fed's decision earlier on in December to increase the benchmark interest rate was that of inflation concerns. Normally, unless we are dealing with supply side shocks, which do not seem to be anywhe
The Unemployment rate for May just dropped to a historically low 3.8%, its lowest since 1969! This is great news, or is it? The business cycle phenomenon is an interesting short run economic proposition that posits that modern economies go through bouts of growth and stagnation explainable by alternative theories. Real GDP grows positively over some time period hits a peak in economic activity and then starts to experience negative growth, hits a trough, and repeats. What is
So the Fed left interest rates unchanged in May in a year in which most economists predicted that the interest rates would rise several times. What do the data show? For April the CPI rose 2.5% over the last 12 months, and 0.2% in April. Core CPI rose 2.1% over the last 12 months, suggesting that much of the inflation was driven by food and energy price increases, though for other not as volatile products as we have breached the 2% target the Fed uses as its inflation target.
The jobs report for January has been released by the Bureau of Labor Statistics and the labor market continues to reflect the ongoing economic boom as we begin 2018. Unemployment rate held steady at 4.1% while 200,000 jobs were added to the economy.
Another important statistic showed a historic rise - wage growth accelerated to its fastest year on year pace since June 2009. This is good news and lends credence to the narrative of the US economy operating at full employment