US Monthly Economic Indicators (Through November 2024) US core consumer price inflation rate (excluding food and energy) is trending at 3.7% annualized and mildly accelerating. The Fed's favorite inflation metric, core personal consumption expenditures price inflation rate (excluding food and energy) is trending at 2.0% and decelerating, right where they want it, but we have divergence with the CPI. I thought it might be the housing component, but that doesn't appear to be the case. It seems like they should have a consistent inflation metric. Average hourly earnings change is trending at 4.8% annualized, which means that workers are beating inflation. Unemployment rate trend is 4.2%, still very low. These are all decent numbers. Volatile producer price inflation is actually trending negative. On the activity side, Industrial Production (real) is trending down while Retail Sales (nominal) are trending up. Housing Starts (units) are trending flat. Money supply M2 is trending up, reflecting loosening by the Fed. Two-year and ten-year Treasury yields are both trending mildly down, although the most recent Treasury rate figures are a up a bit, to 4.3% for 2-year and 4.5% for 10-year, but the trend is generally down and non-inverted. Conference Board's Leading Economic Index finally reversed course and increased in November, in line with moderate growth and no recession. Our Simple Macro Model forecasts trend real growth and quiet inflation over the next few quarters. For most of us, that would be a welcome outcome. This economy is better than people seem to think it is.
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