Typical headline – “U.S. Consumer Price Growth Cools, Smallest Gain in Seven Months“, and “Treasuries Rally After CPI Seen Pushing Off Taper: Markets Wrap” or “Consumer prices climbed more slowly in August, welcome news for the Fed“. Here’re the graphical depictions of the undershoot, first in levels (updating graph from yesterday’s post).
Goldman Sachs Current Activity Indicator (CAI) dips into negative territory in August. Since the CAI is scaled to GDP annualized growth, this implies negative GDP growth in that month.
[For my Econ 435 students] Consider the following graphs. Figure 1 is M1 and M2 to real GDP (0.80 means 80%) for the United States. Figure 2 is M1 to real GDP on left scale, and CPI-all urban on the right scale (taking on a value of 100 in the period 1982-84).
The CPI release for August numbers is tomorrow. As of today, here are the Cleveland Fed nowcasts for CPI and Core CPI:
From Ha, Kose, and Ohnsorge, One-Stop Source: A Global Database of Inflation:
From FT Friday, “Economists predict US interest rate rise in 2022” (Colby Smith/Christine Zhang), discussion of results of the second FT-Chicago Booth IGM survey of macroeconomists:
Today we are fortunate to be able to present a guest contribution written by Georgios Georgiadis (European Central Bank), Helena Le Mezo (European Central Bank) , Arnaud Mehl (European Central Bank), and Cédric Tille (Graduate Institute for International and Development Studies, Geneva). The views expressed in this column are those of the authors and do not necessarily reflect those of the ECB or the Eurosystem. They should not be reported as such.
The International Trilemma — sometimes called the Impossible Trinity — is the proposition that a country cannot pursue simultaneously full capital mobility, full exchange rate stability, and full monetary autonomy.
The undershoot in nonfarm payroll employment is noticeable, with a flattening in high contact services employment growth.
With the August employment situation release, we have the following picture of the macroeconomy.