U.S. retail gasoline prices last week averaged over $2.80 a gallon, thirty cents higher than a month ago. The preliminary University of Michigan index of consumer sentiment for May was 88.6, down 7 points from the month before. Are these two developments related?
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Author Archives: James_Hamilton
UCSD Chancellor’s Associates Award
I was recently honored to receive the UCSD Chancellor’s Associates Award for Excellence in Research and Social Sciences. Here’s a video they made for the event.
Energy prices and consumer spending
Among the disappointments in the 2015:Q1 GDP figures was weak consumption growth, which was a little surprising given the extra cash most consumers have on hand as a result of lower energy prices. I wanted to take a look at how the recent consumer behavior compares with what we’ve seen historically.
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Economy stalls in the first quarter
The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 0.2% annual rate in the first quarter. And that was even after a big inventory build-up from goods produced but not sold. Taking out the inventory contribution, real final sales fell by half a percent at an annual rate.
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Hitting the Fed’s targets
The economy has steadily been moving closer to the Fed’s long-run objectives. But we’re still not there yet.
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2015 Econbrowser NCAA tournament winner
Congratulations to Joseph, winner of this year’s Econbrowser NCAA tournament challenge. Even though the championship game has yet to be played, using high-level mathematics I have deduced that no one can catch Joseph’s lead, no matter who wins Monday’s game. Hats off to Joseph, Vivian Darkbloom and many others of you who answered, yes, Wisconsin could beat Kentucky.
Two number one seeds meet in the finals, just as I predicted. Unfortunately, I had the wrong pair!
World interest rates
Ben Bernanke has joined the blogosphere, offering an invaluable resource for anyone wanting to understand recent economic developments. Last week he had a series of articles examining factors behind the very low real interest rates on long-term bonds.
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Oil sands outlook
On Friday I visited the University of Alberta in Edmonton, where falling oil prices have brought a record provincial budget deficit despite aggressive tax increases and spending cuts. Here I pass along some of what I learned about how the plunge in oil prices is affecting Alberta’s oil sands operations.
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Fed moves the markets
As widely expected, at Wednesday’s FOMC meeting the Federal Reserve dropped its statement that “the Committee judges that it can be patient in beginning to normalize the stance of monetary policy”, the magic formula that many observers had thought would open the way for a hike in interest rates at the Fed’s June meeting. But the yield on a 10-year U.S. Treasury bond dropped 10 basis points immediately following the FOMC release.
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U.S. oil supply update
The EIA released a new drilling productivity report last week, allowing us to update our graph of the drilling rig count in the four major tight oil regions. Active rigs in those areas are now 32% below their peak last October, the lowest level in 3 years.
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