News

BLS Releases March 2019 Consumer Price Index (April 2019)

04.10.2019

The Consumer Price Index report, released by the U.S. Bureau of Labor Statistics, provides the latest evidence that inflation is soft; further evidence that the Federal Reserve Bank’s current policy stance of wait-and-see remains unaltered.  The Consumer Price Index for all urban consumers (CPI-U) rose a seasonally adjusted 0.4 percent in March from the prior month.  Over the last 12 months, the all items index increased by 1.9 percent before seasonal adjustment.

The energy index increased by 3.5 percent in March, accounting for about 60% of the seasonally adjusted all items monthly increase.  The gasoline index increased sharply, the electricity index also increased, although the natural gas index declined.  Food indexes—food at home and food away from home—increased by 0.3 and 0.4 percent respectively in March. 

Core inflation—all items minus food and energy—rose 0.1 percent in March.  The Fed’s preferred gauge has held steady at around its 2.0 percent price growth target, a “healthy for the economy” level.  Along with the shelter index, the indexes for medical care, new vehicles, recreation, education, and tobacco all increased.  In contrast, the indexes for apparel, used cars and trucks, and airline fares all declined in March.

The all items index increased 1.9 percent over the last 12 months ending in March; a larger increase than the 1.5 percent rise for the period ending in February.  Core inflation rose 2.0 percent over the last 12 months while the food index rose by 2.0 percent and the energy index declined by 0.4 percent.  The Fed has pointed to muted inflation pressures in recent weeks as one reason for the pause in their raising of short-term rates. 

The full press release can be found via the link below.

Next release is Wednesday, April 10, 2019, for the March 2019 Consumer Price Index.

BLS Releases March 2019 Employment Situation (April 2019)

04.05.2019

Nonfarm employment added 196,000 jobs in March, a result more in line with expectations than the scant, 33,000 jobs added in February. The unemployment rate remained steady at 3.8 percent and hourly wages increased modestly. 

Averaging over the first three months of 2019 results in a solid 180,000 job growth, which amounts to nearly double its underlying demographic trend (Approximately 100,000 people enter the labor market each month).  Job gains occurred across a wide range of sectors in March including health care, professional and technical services, food and drinking places, and construction.  Health care added 49,000 jobs, mainly in ambulatory health care services and hospitals.  Professional and technical services added 34,000, food service and drinking places added 27,000, and construction added 16,000.  Manufacturing employment showed little change for the second month in a row (-6,000 in March, following +1,000 in February).

Despite stronger jobs growth, the unemployment rate remained unchanged in March.  During the month, the labor force participation rate showed little change at 63.0 percent.  The employment rate—or employment-to-population ratio (EPOP or the percentage of adults with jobs)—showed little change as well at 60.6. 

The tighter labor market is showing some dividends in wage growth.  The average hourly wage is up 3.2 percent over the last year; over the last three months (December, January, and February), the annualized rate was up 3.3 percent.  With the core rate of inflation at 2.1 percent, increased hourly wages translate to modest real wage gains.   

In sum, this is a mostly positive jobs report.  The pace of job growth that began eight years ago is continuing, with the economy adding a total of 2.5 million jobs over the past twelve months.  This growth rate is pulling more workers into the labor market, which is now tight enough to produce real wage gains. 

The full BLS press release on the March 2019 employment situation can be accessed in the link below:

The next employment situation report for April 2019 will be released on Friday, May 3, 2019. 

BEA Releases Third Estimate of Fourth Quarter GDP (March 2019)

03.28.2019

Real gross domestic product (GDP) increased at an annual rate of 2.2 percent in the fourth quarter of 2018, according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.4 percent. The GDP estimate released today is based on more complete source data than were available for the "initial" estimate issued last month. In the initial estimate, the increase in real GDP was 2.6 percent. With this estimate for the fourth quarter, the general picture of economic growth remains the same; personal consumption expenditures (PCE), state and local government spending, and nonresidential fixed investment were revised down; imports, which are a subtraction in the calculation of GDP, were also revised down.

The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, private inventory investment, and federal government spending. Those were partly offset by negative contributions from residential fixed investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased. The deceleration in real GDP growth in the fourth quarter reflected decelerations in private inventory investment, PCE, and federal government spending and a downturn in state and local government spending. These movements were partly offset by an upturn in exports and an acceleration in nonresidential fixed investment. Imports increased less in the fourth quarter than in the third quarter.

BLS Releases February 2019 Consumer Price Index (March 2019)

03.12.2019

The Consumer Price Index report, released by the U.S. Bureau of Labor Statistics, provides the latest evidence that inflation is soft; further evidence that the Federal Reserve Bank’s current policy stance of wait-and-see remains unaltered.  The Consumer Price Index for all urban consumers (CPI-U) rose a seasonally adjusted 0.2 percent in February from the prior month.  Over the last 12 months, the all items index increased by 1.5 percent before seasonal adjustment.

The energy index edged upward slightly after declining in the three previous months.  Overall the energy index rose by 0.4 percent, particularly commodities of gasoline (up 1.5%) and fuel oil (up 2.6%); meanwhile the energy services (electricity and utility-piped gas) declined.  Food indexes—food at home and food away from home—each increased by 0.4 percent in February. 

Core inflation—all items minus food and energy—rose 0.1 percent in February.  The Fed’s preferred gauge has held steady at around its 2.0 percent price growth target, a “healthy for the economy” level.  Along with the shelter index, the indexes for personal care, apparel, and education all increased.  In contrast, the indexes for recreation, medical care, used cars and trucks, and new vehicles all declined in February.

The all items index increased 1.5 percent over the last 12 months ending in February; marking the smallest increase since the period ending in September 2016.  The energy index decreased by 5.0 percent while the food index increased by 2.0 percent over the last 12 months.  Core inflation rose 2.1 percent over the last 12 months.  The Fed has pointed to muted inflation pressures in recent weeks as one reason for the pause in their raising of short-term rates. 

The full press release can be found via the pdf below.

Next release is Wednesday, April 10, 2019, for the March 2019 Consumer Price Index.

BLS Releases February 2019 Employment Situation (March 2019)

03.08.2019

Nonfarm employment barely grew in February, adding a scant 20,000 jobs, far less than expected, after adding 311,000 and 227,000 in January and December respectively. Yet, the unemployment rate decreased to 3.8 percent and hourly wages posted their best annual gain in nearly a decade.  Nonfarm employment is based on a survey of employers while unemployment is drawn from a household survey.  In recent months, results from these two surveys had moved in opposite directions—strong employment gains but rising unemployment.  February’s results provide some correction to this divergence.  Both of these broad measures were likely affected by the partial Federal government shutdown and severe weather.

Averaging over the last three months results in a solid 186,000 job growth, which amounts to double its underlying demographic trend.  (Approximately 100,000 people enter the labor market each month.)

While a wide range of industries posted growth in January, these same industries sharply slowed in February, with several sectors losing jobs.  Employment in construction declined by 31,000 in February, offsetting a 53,000 increase in January; education lost 18,000 workers; and transportation and warehousing, retail trade, mining, and government also shed employment.  Job gains occurred across other sectors in February including professional and business, health care, wholesale trade. and manufacturing.  Professional and business added 42,000 jobs, health care gained 21,000 jobs, wholesale trade added 11,000 jobs, and manufacturing gained 4,000 jobs. 

Despite limited nonfarm jobs growth, the unemployment rate decreased to 3.8 percent in February, from 4.0 percent in January.  Among the unemployed, the number of job losers and person who completed temporary jobs (including people on temporary layoff) declined by 225,000. This decline reflects, in part, the return of federal workers who were furloughed in January due to the partial government shutdown.  During the month, the labor force participation rate remained steady at 63.2 percent.  The employment rate—or employment-to-population ratio (EPOP or the percentage of adults with jobs)—remained steady as well at 60.7, a high for the recovery. 

The tighter labor market is showing some dividends in wage growth.  The average hourly wage is up 3.4 percent over the last year; over the last three months (December, January, and February), the annualized rate was up 3.3 percent.  With the core rate of inflation at 2.2 percent, increased hourly wages translate to modest real wage gains.   

In sum, this is a mixed jobs report.  The pace of job growth that began eight years ago is continuing, with the economy adding a total of 2.5 million jobs over the past twelve months.  This growth rate is pulling more workers into the labor market, which is now tight enough to produce real wage gains.  Finally, these latest numbers come with an asterisk.  Payrolls were likely distorted by the effects of the government shutdown and severe weather and these numbers are likely to be revised upward.  Whether this report signals a slowing economy will need at least another month of data. 

The full BLS press release on the February 2019 employment situation can be accessed in the link below:

The next employment situation report for March 2019 will be released on Friday, April 5, 2019.