US Monthly Economic Indicators (Through April 2025) US core consumer price inflation rate (excluding food and energy) is trending at 2.4% annualized and decelerating. The Fed's favorite inflation metric, core personal consumption expenditures price inflation rate (excluding food and energy) is also trending at 2.4% and decelerating. Both measures are only marginally above the Fed's 2% target. Volatile producer price inflation is trending up at 4.6%. Average hourly earnings change is trending at 2.4% annualized, which means that workers are no longer beating core inflation. Unemployment rate trend is 4.1%, still very low. On the activity side, Industrial Production (real) and Retail Sales (nominal) are trending up while Housing Starts (real) are relatively flat. Money supply M2 is trending up, reflecting consistent loosening by the Fed, notwithstanding their anxiety about inflation. Two-year and ten-year Treasury yield trends are divergent and non-inverted, which is healthy. The most recent daily Treasury rate figures are 4.0% for 2-year and 4.5% for 10-year, again non-inverted. Conference Board's Leading Economic Index plunged in April, driven by current policy uncertainties. Our Simple Macro Model forecasts trend real growth and quiet inflation over the next few quarters, but that picture is significantly lagged and uninformative at this point. The economy is currently in flux with chaotic economic moves by the Trump administration. Consumer Sentiment also plunged in April and remained flat in May, again reflecting huge economic uncertainty; this reflects a distraught public and is definitely a negative signal. We are in a new, blustery domain.
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