Slow growth and low inflation

The chart above shows two series: first Real Potential GDP (GDPPOT, black line, measured quarterly) compared to Real Gross Domestic Product (GDPC1, blue line, measured quarterly) for the period 2003 to 2013. The vertical gray bar is The Great Recession (aka, “the lesser depression”, or “the Long Recession”) which began in December 2007 and [...]

Wages are growing nowhere

The chart above shows year on year percentage change of the average hourly earnings of production and nonsupervisory employees (i.e., non management staff, AHETPI, black line), measured monthly. I’ve modelled this across the last two US recessions and some observations are immediately apparent. First, considering what economists call the “early 2000′s recession” that ended [...]

Don’t be fooled by good news on housing

I notice lots of happy news in the US media about housing, most centred arounds reports of a rise in the S&P Case-Shiller 20-City Home Price Index. I’ve already expressed my views on this – you have to look not only at the home price index but also at delinquency rates; how many people [...]

Paying more for energy

As a followup to yesterday’s post about the disconnect between widely reported inflation numbers and some of the components, today I’m looking at energy.

The chart above shows the average hourly earnings of all employees (CES0500000003, black line) compared to two other series. As before, I’m presenting the Consumer Price Index for All [...]

Paying more to eat

One of the great puzzles about The Fed’s Quantitative Easing profligacy has been inflation: specifically, where is it?. While I discussed this phenomenon a couple of months ago, specifically pointing out that the velocity of money was at near term lows while the supply of money was increasing wildly, I thought I’d look deeper. [...]

A peculiar type of stagflation

In the 1970s we all learned a new word stagflation – relatively high unemployment accompanied by relatively low economic growth. The chart above presents two periods with the same series: unemployment (UNRATE, black line, quarterly, in percent), the Consumer Price Index, or CPI (CPIAUCSL, red line, quarterly, percent change from one year ago), the [...]

Inflation or deflation?

Lots has been written about the sharp increase in the Producer Price Index (PPI) we saw last week – 1.7% in ONE MONTH – but how persistent will this be? The chart above shows PPI (PPIACO, black line) since the onset of the Credit Crunch. Curious, but as I’ve written about before we are [...]

Where is the inflation?

I’ve written before about what I view as the big elephant in the room today, inflation, but where is our unwelcome guest? Is it likely he’s slowly approaching and going to make a grand entrance in our lives? I kinda think so, and here is why. The chart above shows weekly prices for three [...]

What about inflation?

Just looking at the mainstream media it seems inflation has been almost forgotten, although I have written about pressures building in specific commodity sectors. But let’s face it: defaults and writedowns, particularly of the scale we’re seeing in Europe and The United States are inherently deflationary. Also the plunging cost of energy factors into [...]

A gain of almost 300%, sweet

On May 4th I wrote about the opportunities gold mining stocks presents. I suggested folks take advantage of the opportunity presented by a divergence between HUI (sometimes called the “gold bugs index”) and spot gold prices. So lets look at the record; the chart above shows the daily price of spot gold ($GOLD, black [...]