What Tuesday’s CPI Report Means For the Economy
13 minutes ago
Forecasters are expecting Tuesday’s report on inflation to get the Federal Reserve closer to the “confidence” they’ve been seeking.
The January Consumer Price Index (CPI) is expected to rise at its lowest annualized rate in nearly three years, according to a survey of economists by Dow Jones Newswires and the Wall Street Journal.
This and other inflation reports over the next few months could be key in determining how soon, and how quickly, the Fed will cut its benchmark interest rate. Fed chair Jerome Powell said he and other Fed policymakers want more “confidence” that inflation has been tamed before cutting rates.
“We think part of the confidence the Fed is looking for is in the composition of disinflation,” wrote economists at Bank of America Monday. “The market is also going to care about the composition, both as it informs the Fed’s decision on when to cut and the run rate of disinflation going forward.”
Read more about what Tuesday’s report could mean for the economy here.
Consumers Continue Spending in 2024, NRF Report Shows
2 hr 11 min ago
Early indicators show consumers sustained their spending habits into 2024, driving sales higher again in January.
According to a CNBC/National Retail Foundation (NRF) report released Monday, core retail sales, which excludes volatile automobile, gasoline and restaurant sales, were 3.2% higher than the year-ago in January. That’s better than the 2.4% year-over-year sales growth the report measured for December.
Retail sales were up in six of nine categories tracked by the NRF, including health, clothing, and groceries.
“January sales continued the strong performance of retail sales in December, which is impressive coming off a record holiday season,” said NRF President and CEO Matthew Shay.
The Economy Is Looking Better From Main Street
2 hr 35 min ago
Household views on personal finances and the economy are looking brighter as high inflation continues to fade.
Outlooks got brighter for several measures of optimism about the economy and personal finances in January, according to a monthly survey of 1,300 households conducted by the Federal Reserve Bank of New York. Most people said their finances were better off than a year ago since November 2021; and the median expectation for the inflation rate in three years fell to 3.03%, its lowest since March 2020.
The survey was the latest in a wave of polls showing people’s views of the economy are brightening as the high inflation of the past few years simmers down. Sentiment is coming more in line with hard data showing the economy and household finances are generally in good shape.
Despite the more positive outlook, people took a dimmer view of some aspects of the labor market. On average, people said they had a 54.2% chance of finding another job in the next three months if they lost their current position, the lowest since September 2021. Recent government data on the labor market has been mixed, with companies still hiring at a brisk pace though many have pulled back on job openings in recent months.