• Assuaging Concerns

    Persian Gulf Problems  CPI rose a full 0.1% in April as inflation was held in check largely due to a decline in gasoline prices. On Thursday, however, we got news that two oil tankers were attacked in the Strait of Hormuz, escalating fears of potential disruption in the supply of oil, and sending oil prices higher. So, we could see this put some upward pricing pressure on gasoline for the May CPI read. The annual increase fell to 2% from 2.1% last month, and is in line with the Fed’s 2% target.  Moral of the story: The biggest thing that seems to be driving inflation right now is rising rents, but aside from…

  • **cue ominous music**

    Same old, same old  Manufacturing data continue the downward trend that started last fall, which is nothing new at this point, but I mean not ideal. Manufacturing businesses grew at the slowest pace in two and half years (since the month before Trump was elected) in May because, ICYMI, we’re fighting with China. At least it seems like we’ve hit the pause button on the fight with Mexico.   Moral of the story: The ISM Manufacturing index is only 2.1 points away from falling into contractionary territory. China and Mexico are two of our three largest trade partners, so it can’t be a surprise that the manufacturing sector is feeling a little blue. …

  • Oy Vey

    GDP was revised…wait for it…downward  Remember the much stronger-than-expected initial GDP print we got for the first quarter? It was revised down to 3.1% from 3.2% (economists were slightly more pessimistic, ready for a revision down to 3%). The revisions of importance – business investment, inventories, and inflation were revised downward while exports were revised upward. Read: the weakness in consumer and corporate metrics remain.  Moral of the story: The strength in first quarter GDP is still being driven by temporary factors that could easily be reversed in the second quarter. Given the escalating trade tensions with China, I don’t see corporate profits, manufacturing, or business investment rebounding in the…