Dramatic plunge in headline CPI m/m inflation, but both headline and core surprise on upside.
Inflation Adjusted Wages since the Pandemic
Inflation exceeds average hourly earnings in the aggregate (private sector) and for Leisure and Hospitality Services (production and nonsupervisory). But they are still ahead of 2020M02 levels.
Guesstimating the US-Euro Area Core Inflation Differential in April
April HICP numbers are out for the Euro Area. The US reports April CPI on Wednesday. Using the Cleveland Fed’s nowcast for April core (0.52% m/m vs. Bloomberg consensus 0.4%), we have the following picture.
US-Euro Area GDP Performance Pre/During Pandemic
We now have Q1 GDP for the US and Euro Area. While US inflation as measured by CPI/HICP is higher than Euro Area (US core accelerating relative to EA by 0.7 ppts since the pandemic), US GDP growth has also been higher.
Five Year Inflation Breakeven, Estimated Expected Inflation, and Oil
Five year inflation breakevens have risen tightly with oil prices, while accounting for inflation and liquidity premia implies a more gradual albeit more steady increase in implied expected inflation.
Business Cycle Indicators and Employment
With the release of April employment (428K > 391K Bloomberg consensus), we have the following graph of key indicators noted by NBER BCDC.
“Prosperity: Crises, Debt & the Future of American Economic Policy”
That’s the name of the economic session at the La Follette Forum on American Power, Prosperity and Democracy. A video of this panel is available through Youtube. Here are some recounting and thoughts on the panel discussion.
Guest Contribution: “The Surprising Drop in French Economic Activity “
Today, we are fortunate to present a guest contribution written by Laurent Ferrara (Professor of International Economics, SKEMA Business School, Paris, and Chair of the French Business Cycle Dating Committee).
Financial Market Signals, Post-FOMC
Higher rates soon, long term inflation expectations anchored, and on term spread signals growth (as do real rates).
Guest Contribution: “The Fed Needs at Least Four More 50 Basis Point Rate Increases in 2022 to Get Back on Track”
Today, we present a guest post written by David Papell and Ruxandra Prodan, Professor and Instructional Associate Professor of Economics at the University of Houston.