By Scott McIntyre, CFA
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Economic Commentary

Economic news and data drive Fed interest rate policy and financial market movement. The problem for many investors is sorting through the massive volume of news and numbers to separate the critical information from the noise. Our economic commentaries provide clear explanation of key events in layman’s terms, as well as regular interest rate updates.
September 24 , 2021

Lean Supply Remains the Dominant Housing Story

The housing market has cooled a bit in recent months, but demand is still outpacing supply by a wide margin. Although new construction has picked up,...

September 22 , 2021

Powell’s Q&A Indicates QE Taper to Conclude Next Summer

The official statement released at the conclusion of the September FOMC meeting held few surprises, but Powell's post meeting press conference was...

September 16 , 2021

Consumer Spending is Surprisingly Strong in the Final Month of the Second COVID Summer

The emergence of the Delta variant in July caused consumers to tap the brakes on spending, but as the summer wore on, purchases apparently resumed....

September 14 , 2021

Consumer Inflation Moderates Before Next Week’s Fed Meeting

The August consumer price index indicated price pressures may be heading lower, allowing Fed officials additional time to assess the recent economic...

September 09 , 2021

Fall Travel Plans on Hold Amid Fading Growth

This is an unusually sparse week for data releases, but there’s no shortage of economic chatter. There’s little question that the economy is...

September 03 , 2021

Taper Timing Questioned After Payroll Shocker

The "substantial further progress" Fed officials were hoping to see in payroll growth didn’t happen. In fact, the meager +235k jobs added to nonfarm...

September 01 , 2021

Persistent Labor Challenges to Test Fed Resolve

This morning, the ADP employment change report showed just +374k jobs added to company payrolls in August, well short of the +625k median forecast....

August 27 , 2021

Powell’s Statement Offers Little Beyond Familiar Phrases

Going into the virtual Jackson Hole economic symposium, expectations had emerged that clear direction on a taper timeline would be revealed. In his...

August 26 , 2021

Economic Data Dismissed as All Ears Turn to Powell

This morning, the second-tier economic data releases generally fell short of the mark …but not by much and frankly, all ears are on the Fed right now...

August 20 , 2021

Uncertainty Chips Away at Third Quarter Outlook

The rapid spread of the Delta variant has prompted a recalibration of the economic outlook, with a majority of economists already lowering third...

August 17 , 2021

Consumer Spending Slows as Delta Surges and Stimulus Fades

Analysts had anticipated consumer spending would slow as stimulus checks were gradually spent. The expectation was that Americans would quickly...

August 13 , 2021

Consumer Sentiment Dives to Decade Low

The University of Michigan Consumer Sentiment Index dropped a stunning -13.5% in August to 71.2, well below the expected 81.2 median forecast. What...

August 11 , 2021

Consumer Prices Moderate in July, but Remain Elevated

Headline CPI rose +0.5% last month, down from the +0.9% reading in June, while core CPI was up +0.3%, well below the +0.9% June core advance. On a...

August 10 , 2021

The Seriousness of the Delta Surge

The spread of the Delta variant, which is now responsible for 90% of new covid cases, has happened so quickly that the magnitude of the problem...

August 06 , 2021

Yields Rise on Solid Payroll Gains

U.S. companies added +943k jobs to payrolls in July, topping the +870k median forecast, while the June payroll count was revised upward from +850k to...

August 05 , 2021

Falling Claims Signal Upside for Friday’s Labor Report

First-time filings for state unemployment benefits fell for the second straight week, while continuing benefit claims dropped to the lowest level...

August 04 , 2021

Payrolls Disappoint in ADP Employment Report

This morning, ADP employment services reported just 330k jobs were added to company payrolls in July, less than half of the median forecast and down...

July 29 , 2021

Q2 GDP Falls Short, but the Recovery Story Remains Intact

The initial reading of second quarter GDP missed the +8.4% median forecast with a +6.5% quarter-over-quarter annualized print. However, this number...

July 28 , 2021

Markets Sigh as the Fed Indicates No Change for Now

This afternoon, Fed officials voted unanimously to hold interest rates steady. In the official statement released at the conclusion of the July FOMC...

July 22 , 2021

Mortgage Rates Drop as Existing Home Prices Reach New Highs

This morning, Freddie Mac reported the fourth straight weekly decrease in the average mortgage lending rate with the 30-year fixed dropping from...

July 16 , 2021

Retail Sales Rebound as Consumers Increase Summer Spending

Stronger-than-expected consumer spending during the month of June nudged bond yields higher this morning as a more robust economy may signal less...

July 14 , 2021

Producer Prices Pile On

The producer price index (PPI) for June piled on to yesterday’s outsized +0.9% gain in consumer prices with a +1.0% increase at both the headline and...

July 13 , 2021

CP-Eye Popping

An eye-popping headline for June’s consumer price index, which nearly doubled forecasts with a +0.9% print that was the largest increase since June...

July 07 , 2021

2021 Q2 Economic Recap and Rate Outlook

The U.S. economy accelerated in the spring months as COVID-19 slowed to a crawl and consumer demand for goods and services surged. The story of the...

July 07 , 2021

Minutes to the June FOMC Meeting Signal Patience

The minutes to the June 16 Fed meeting showed committee members (as expected) have begun discussing the appropriateness of scaling back QE asset...

July 02 , 2021

Solid Labor Report Unlikely to Alter Fed Mindset

This morning, the June labor report surprised to the upside with +850k jobs added to U.S. company payrolls. It was the biggest monthly gain since...

July 01 , 2021

ISM Factory Survey Indicates Highest Prices in Four Decades

The ISM manufacturing index slipped from 61.2 to 60.6 in June, still very strong historically, but down from a 38-year high in March. The Institute...

June 30 , 2021

Sorting the Pieces to this Week’s Economic Puzzle

The highlight of the week is expected to be the monthly labor market report released on Friday morning, but there is no shortage of data to chew in...

June 24 , 2021

Has Housing Demand Peaked?

There are indications that the remarkable pandemic-fueled housing run may be slowing …to a brisk jog. Total home sales in 2020 were the strongest in...

June 18 , 2021

Fed Offers Welcome Relief to the Short End

At the conclusion of the June FOMC meeting this afternoon, Fed officials announced no change in the overnight target rate and that they will continue...

June 18 , 2021

Short Yields Rise and Long Yields Plunge as Fed Member Goes Off Script

St. Louis Fed President James Bullard told CNBC’s Squawk Box this morning that he believes it would be prudent to begin hiking the overnight target...

June 15 , 2021

Retail Sales Cool, Producers Prices Boil

The Commerce Department’s report on May retail sales missed expectations, but the shortfall was offset by upward revisions to prior months. Despite...

June 10 , 2021

Brisk Growth Pushes Consumer Prices Higher

So far, investors agree with Fed officials that inflationary pressure will be short-lived, but hotter-than-expected prices have introduced some...

June 08 , 2021

Posted Job Openings Spike to Record High before Vacation Boom

The Job Openings and Labor Turnover Survey (JOLTS) continues to shred the argument that jobs are slow to return as the economy reopens. The survey...

June 04 , 2021

Job Gains Fall Short Again in May

Economists have warned there will continue to be an unusual amount of noise in the economic data, that seasonal-adjustment factors are suspect in the...

June 03 , 2021

Improving Labor Numbers and Optimistic Purchasing Managers will Pressure Fed

This morning’s stronger-than-expected labor market numbers suggest May non-farm payrolls (scheduled for release tomorrow) could surprise to the...

May 28 , 2021

Markets Yawn as Prices Soar

The Fed’s preferred inflation measure, core Personal Consumption Expenditures (PCE), jumped from +1.9% to +3.1% on a year-over-year basis in April,...

May 19 , 2021

Labor and Materials Shortages to Challenge Otherwise Optimistic Homebuilders

U.S. housing starts fell -9.5% to a 1.57 million unit annualized pace in April, well below the 1.7 million median forecast. Housing starts have been...

May 14 , 2021

April Retail Sales Unchanged at Lofty Levels

The headline retail sales number for April was unchanged, falling short of the median forecast of +1.0%. However, the March sales gain was revised...

May 12 , 2021

April Prices Run Hot

The Consumer Price Index (CPI) rose by a seasonally-adjusted +0.8% in April, well above the +0.2% median forecast. It was the biggest monthly gain...

May 07 , 2021

Markets Rally on Shocking Payroll Miss

The experts were in agreement: non-farm payrolls would surge again in April. They were wrong. In perhaps the biggest economic data disappointment in...

May 05 , 2021

Purchasing Managers Indicate Inability to Meet Rising Demand

The ISM purchasing managers indexes for April told similar stories of widespread supply shortages, increasing price pressure and challenges in...

April 29 , 2021

Q1 GDP is Solid, but Short of the Whisper

The initial reading of first quarter GDP came in at a quarter-over-quarter, annualized rate of +6.4%, a bit below the +6.7% median forecast, but well...

April 28 , 2021

Market Yawns as Fed Treads Familiar Path

Fed officials concluded their two day FOMC meeting this afternoon, with no change in the overnight funds target or the amount of monthly assert...

April 23 , 2021

Spring Housing Data Still Indicating a Hot Summer

This morning, the National Association of Realtors (NAR) announced new home sales had rebounded sharply in March following a weather-related plunge...

April 16 , 2021

Housing Starts Accelerate to Fill Severe Shortage of Homes

Yesterday, Freddie Mac reported a 3.8 million unit shortfall in single-family homes, 52% higher than Freddie’s assessment in 2018. The supply/demand...

April 15 , 2021

Giant Step Up in Consumer Spending to Push Q1 GDP Higher

Retail sales soared by +9.8% as a combination of warmer weather, vaccine success, business reopenings, pent-up demand, piles of available cash, tax...

April 13 , 2021

Price Pressure on the Rise, with More to Come

This morning, the Bureau of Labor Statistics reported the headline Consumer Price Index (CPI) rose by a seasonally-adjusted +0.6% in March following...

April 08 , 2021

2021 Q1 Economic Recap and Rate Outlook

The path of the Covid-19 virus dictated the direction of the economy in 2020, and the first quarter of 2021 was no exception. GDP growth was expected...

April 06 , 2021

Surveys Show Service Sector Quickly Gaining Momentum

Fed officials have made it clear that their primary objective is full employment. Admittedly, the labor market still has a long way to go, but the...

April 02 , 2021

March Jobs Report Crushes Forecasts

Most economists expected hiring to accelerate sharply in future months. Apparently, the future is now. The Bureau of Labor Statistics (BLS) reported...

April 01 , 2021

Strong ISM Report is Another Log on the Fire

The outlook of U.S. factory managers in March was the brightest it’s been in over 38 years. The overall manufacturing index climbed from 60.8 to...

March 30 , 2021

Confidence Jump Hints at Future Spending Surge

In February 2021, the Conference Board’s consumer confidence index sat at 90.4, literally on top of its 20-year average. This morning, the March...

March 25 , 2021

Lost Service Sector Jobs on Verge of Return

Yesterday, the Department of Labor reported initial jobless claims fell from 781k to 684k for the week ending March 20th. Although these first-time...

March 23 , 2021

Housing Cools in February

A rise in mortgage lending rates paired with extreme winter weather conditions combined to curb overall home sales during the month of February,...

March 17 , 2021

Patient Fed Shrugs off Possibility of Overheating

The conclusion of the two-day FOMC meeting revealed no change in monetary policy, and a resolute Fed inclined to hold rates steady as the economy...

March 16 , 2021

Cold Weather and Empty Pockets Slow Spending in February

Retail Sales dropped -3.0% last month as consumers battled freezing temperatures and waited on the next round of stimulus checks. The only major...

March 10 , 2021

The Fed’s Role in Rescuing Short Yields

The bond market focus over the last month has been squarely on the sharp selloff on the long end of the yield curve, but short yields are threatening...

March 05 , 2021

Improved Employment Report Reflects Receding Virus Cases

U.S. businesses added +379k jobs to company payrolls in February, nearly twice the median forecast. The January gain was revised upward from a...

March 04 , 2021

Powell Misses on Attempt to Calm Markets

The financial markets were eagerly awaiting this morning’s interview of Fed Chairman Jay Powell at the Wall Street Journal’s Virtual Jobs Summit. In...

March 03 , 2021

Yield Climb Resumes on Inflation Concerns

The bond market selloff returned this morning as inflation expectations continue to rise. Higher bond yields, combined with concerns over equity...

February 26 , 2021

The Coiled Spring of Pent-Up Demand

In this morning’s economic releases, U.S. personal income for January rose +10%, the highest percentage increase in nine months according data from...

February 25 , 2021

Bond Yields Rise as Another Round of Strong Data Adds Fuel to First Quarter Growth Story

Bond yields continued to climb this morning as economic numbers indicate Q1 growth is gaining momentum. When the year began, the widely-held...

February 23 , 2021

Markets Still Jittery Despite Powell’s Assurance of Continued Accommodation

Fed Chairman Jay Powell testified this morning in front of the Senate Banking Committee on the state of the U.S. economy and the Fed’s monetary...

February 18 , 2021

First Quarter GDP Outlook Suddenly Much Brighter

My apologies to fellow Texans facing much bigger issues than quarterly GDP projections. We went 60 hours without power and most of Monday and Tuesday...

February 12 , 2021

Economic News Scraps from a Light Week

Wednesday’s consumer price index (CPI) report was probably the highpoint of an otherwise lame week for economic data…and even that was a nonevent as...

February 10 , 2021

Future Inflation Likely to be Much Warmer, but January Prices are Still Cool

Consumer prices were well behaved in January as headline CPI climbed by +0.3% and core CPI was unchanged for the second straight month. Energy prices...

February 05 , 2021

Weakening Labor Picture Strengthens Stimulus Bid

The January employment report was a disappointment with just 49k jobs added to company payrolls, less than half of the median forecast. The...

February 03 , 2021

Purchasing Managers Expect Better Days

This morning, the non-manufacturing ISM report showed rising optimism among service sector purchasing managers. The overall index rose from 57.7 to...

January 29 , 2021

Rising Income and Elevated Savings Bode Well for Future Spending

Most analysts expect continued deceleration in the pace of GDP growth in the first quarter of 2021, but recent data and encouraging vaccine progress...

January 27 , 2021

Fed Stands Pat; Powell Dodges GameStop Question

In the official statement released this afternoon at the conclusion of the two-day FOMC meeting, Fed officials acknowledged that the pace of economic...

January 21 , 2021

More Aggressive Virus Approach Could Weigh on Q1 GDP

A flurry of better-than-expected economic releases hints the first quarter could be a bit stronger than most are anticipating, while the new...

January 15 , 2021

Stressed Consumers Cut Back During the Holidays, but Help is on the Way

Consumer spending was expected to be weak, but this morning’s release of the December retail sales report was quite a bit weaker than analysts had...

January 14 , 2021

Unemployment Filings Soar as COVID Asserts Itself

This morning’s key economic news was (yet again) deterioration in the labor market. Initial jobless claims jumped from 787k to 965k for the week...

January 08 , 2021

Unexpected December Job Loss Increases Urgency for Additional Aid

Non-farm payrolls dropped by -140k in December, well below the puny +50k expected increase. The establishment survey losses were heavily concentrated...

January 07 , 2021

Optimism Reigns Despite Surging Virus

This morning, the Institute for Supply Management (ISM) non-manufacturing index for December climbed from 55.9 to 57.2, beating forecasts. (Any...

January 04 , 2021

2020 Q4 Economic Recap and Rate Outlook

The third quarter of 2020 lived up to lofty expectations with GDP expanding at a remarkable +33.4% annualized pace. The record growth was fueled by...

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