From U.Michigan, preliminary sentiment at 48.9 vs. 46.1 consensus.
Sentiment Beats Expectations, Slightly
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EJ Antoni: “E.J. Antoni: U.S. utility prices down 1.5% since Iran war began”
As is often the case, I cannot verify this claim made by EJ Antoni, Chief Economist for Heritage Foundation. What is true is that the price of natural gas (piped) has declined. But not for electricity. And roughly 42% of households are heated/cooled by electricity (a rising share), compared to 47% for natural gas. In addition, for lighting etc. you’d need to draw on electricity.
Imagining: Would a Biden “Drill, Baby, Drill” Regime Have Mitigated a Iran-War Induced Cost-Push Shock
Heritage Foundation’s Chief Economist EJ Antoni speculates:
Trump: “I Love the Inflation”
Which is good insofar as we’re going to get plenty more of it (see quote here). PPI upside surprise +1.1% vs. +0.7 m/m (Bloomberg). Core slightly below consensus (+0.4% vs. +0.5%). AIER’s Everyday Price Index near my estimate of (1.18% m/m vs 1.16% nowcasted).
Invaluable New Geopolitical Risk Indexes: AI-GPR, GPR-Oil, and More
Readers of Econbrowser know that I’ve put a lot of stress on using high frequency measures of uncertainty and risk to interpret recent events. One of those indices is the Caldara-Iacoviello GeoPolitical Risk index (GPR), referenced in too many of my posts. Matteo Iacoviello and his coauthor Jonathan Tong have undertaken a new project of invaluable service to the profession, developing AI-GPR, which uses LLMs (paper here).
Headline CPI Inflation at Consensus, Real Wages Continue to Be Eroded
Everyday prices nowcasted to outstripping measured CPI and subindices:
Slowdown in Australia
Given positive Q1 GDP growth (albeit with downside surprise of 0.3% vs 0.5% q/q Bloomberg consensus, vs. 0.4% Melbourne Institute nowcast), there’s been a substantial amount of commentary regarding elevated recession risks [1] [2]. I find this surprising as the IMF’s April WEO projected 2% y/y growth for 2026 — of course conditional on a baseline that assumed eventually decreasing oil prices. On June 3, OECD projected 1.9%, while the latest Economist Intelligence Unit forecast is 1.6%. Eyeballing the RBA forecast as of June 2, it seems like their forecast is about 1.3%, still not negative growth.
First, consider GDP:
Monthly Business Cycle Indicators: Canada
Friday release of May employment (labor force survey):
Trump in Chippewa Falls: Promising Input Price Declines to Farmers
From WisPolitics:
“Sustainable” Employment Growth Is Only at +73K
At least according to EJ Antoni’s definition, in his critique of employment growth under the Biden administration:
gov’t and the gov’t-dominated healthcare sector [employment growth].. it’s all tax-payer funded, and it’s not at all sustainable.