US Monthly Economic Indicators (Through Aug 2024) US core consumer price inflation rate (excluding food and energy) is trending at 1.9% annualized and decelerating. Same is true for the Fed's favorite inflation metric, core personal consumption expenditures price inflation rate, trending at 1.3% and decelerating. Average hourly earnings change is trending at 3.9% annualized, which means that workers are finally beating inflation. Unemployment rate trend has ticked up to 4.3% but is still very low. These are all good numbers. The only concern is that producer price inflation is trending at 3.9% annualized and accelerating slightly, but this is a volatile series. On the activity side, Industrial Production (real) and Retail Sales (nominal) are both trending up. Housing Starts are trending distinctly down. Money supply M2 is trending up, reflecting some loosening by the Fed even before the recent Fed Funds rate cut. Two-year and ten-year Treasury yields are both trending down. The most recent (post-rate-cut) daily figures are down to 3.5% for 2-year and 3.8% for 10-year. Conference Board's Leading Economic Index fell slightly in August, portending sluggish growth, but this preceded the Fed rate cut. 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.
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