September 18, 2016
Clarksville, TN – Fed Governor Lael Brainard, a dove, presented her case for why the central bank should delay an increase in short-term interest rates. While her views are her own (not representative of the Fed as a whole), a more hawkish tilt would have raised the odds of a September rate hike.
The key economic data reports were on the soft side of expectations, but were still consistent with moderate growth in the near term. Retail sales disappointed in August. Industrial production unwound a seasonal quirk that boosted July figures. CPI figures surprise slightly to the upside.
September 8, 2016
Nashville, TN – The traditional wisdom among Silicon Valley’s youthful technorati is to design for what you know—texting your friends in Europe for free (WhatsApp), renting out your bedroom to make extra cash (Airbnb), finding a romantic partner without leaving your house (Tinder). But a handful of entrepreneurs are now looking beyond the millennial market to reach a new demographic with their own needs — baby boomers.
“You’ve got all these 20-something engineering types who are beginning to realize there are older adults who can make use of these products to promote health and well-being,” said Andrew Scharlach, Professor of Aging at the University of California, Berkeley. “What we are beginning to see is the marriage of product developers with the end users that they previously had not been aware of.”
September 4, 2016
Clarksville, TN – The August Employment Report was a little light of expectations. Nonfarm payrolls rose by 151,000 (median forecast: +180,000), with a net revision to June and July of only -1,000. Private-sector payrolls rose by 126,000 – a +150,000 average over the last six months (vs. +221,000 in 2015 and +240,000 in 2014).
The unemployment rate held steady at 4.9% (vs. 5.1% a year ago). Average weekly hours fell (and hours for July were revised lower). Average hourly earnings rose just 0.1%, up 2.4% y/y.
August 29, 2016
Clarksville, TN – Last year, 18 percent of the new jobs created in the United States were in the healthcare industry, and in June of 2015, Forbes magazine declared, “Healthcare is booming.”
Anyone interested in advancing his or her career within this lucrative industry needs to look at, thanks to a recent modification of academic programs within the school’s Department of Health and Human Performance (HHP).
August 28, 2016
Clarksville, TN – In her Jackson Hole speech, Fed Chair Janet Yellen was not expected to provide any significant clues about what will happen at the September 20-21 policy meeting.
Surprise! Yellen provided a strong hint that the central bank is a lot closer to raising short-term interest rates. Yellen said, “I believe the case for an increase in the federal funds rate has strengthened in recent months.” Take that in context with other evidence.
August 21, 2016
Clarksville, TN – The FOMC minutes (from the July 26th-27th policy meeting) showed that officials were divided on the timing of the next rate hike. Some felt that the labor market had already tightened enough and that the Fed risked generating financial excesses by keeping rates so low for so long.
Others felt that there was plenty of time to wait for more information and that it would be harder to correct course if the Fed moved too rapidly. Among voting FOMC members, the hawkish view (those wanting to raise rates sooner rather than later) appeared to be a minority.
August 14, 2016
Clarksville, TN – The economic data remained consistent with moderate economic growth and low inflation. Retail sales figures for July disappointed, coming in below expectations (but partly offset by upward revisions to June).
Preliminary productivity figures for the second quarter were weak (averaging a 0.5% annual rate over the last five years). Jobless claims remained very low. The Producer Price Index fell more than expected and pipeline pressures remained mild or slightly deflationary.
August 7, 2016
Clarksville, TN – As expected, the Federal Open Market Committee left short-term interest rates unchanged. In its policy statement, the FOMC noted that “on balance, payrolls and other labor market indicators point to some increase in labor utilization in recent months.”
More importantly, “near-term risks to the economic outlook have diminished.” Kansas City Fed President Esther George dissented in favor of raising the federal funds target range by 25 basis points (to 0.50% to 0.75%).
July 24, 2016
Clarksville, TN – The economic data calendar was thin and reports were of little consequence for the markets. As expected, the European Central Bank left short-term interest rates unchanged and did not alter its asset purchase plans.
ECB President Draghi indicated that policymakers were encouraged by the financial stability following the initial reaction to the Brexit vote. He also said that more information will become available over time and the ECB would act using all possible tools “if needed.”
July 19, 2016
Clarksville, TN – The economic data were generally on the strong side of expectations. Retail sales rose 0.6% in June (median forecast: +0.2%), but figures for April and May were revised down (still a strong quarter).
Industrial production rose 0.6%, but that largely reflected a rebound in auto output (which had fallen in May). Ex-autos, manufacturing output was flat (-0.2% y/y, consistent with a soft patch, not a recession).