Two separate inflation readings released last week showed both consumer prices and producer prices rose more than economists had expected in January. Retail sales posted their biggest monthly gain in nearly two years. And the labor market has remained robust. The unemployment rate fell to a 53-year low in January, while employers added more than half a million jobs to the economy, a Labor Department report earlier this month showed. (Wall Street Journal, February 20, 2023, https://www.wsj.com/articles/investors-worry-too-hot-economy-will-put-fed-on-more-aggressive-rate-path-bf41e230?mod=series_inflation）
Initial jobless claims, a proxy for layoffs, decreased by 3,000 to a seasonally adjusted 192,000 last week, the Labor Department said Thursday. Weekly claims have remained below the 2019 prepandemic average of about 220,000 since the start of the year. (Wall Street Journal, February 23, 2023, https://www.wsj.com/articles/jobless-claims-edged-lower-last-week-84f80188?mod=economy_more_pos3)
Gross domestic product, a broad measure of the goods and services produced across the U.S., rose at a 2.7% annual rate in the fourth quarter, adjusted for seasonality and inflation, the Commerce Department said Thursday. That was down from a previous estimate of 2.9% growth, and slower than the third quarter’s 3.2% growth. (Wall Street Journal, February 24, 2023, https://www.wsj.com/articles/economy-showing-strength-in-early-2023-after-last-quarters-gdp-gain-revised-modestly-lower-5b068ade?mod=economy_more_pos1)
The Fed’s preferred inflation gauge—the personal-consumption expenditures price index—rose 5.4% in January from a year earlier, the Commerce Department said Friday. The core index, which excludes food and energy and is seen as a better predictor of future inflation, rose 4.7%. Both readings were up slightly from those for the 12 months through December. The central bank aims for 2% annual inflation. (Wall Street Journal, February 24, 2023, https://www.wsj.com/articles/consumer-spending-personal-income-inflation-january-2023-eeffc9ba?mod=economy_lead_story)
The US economy came in hot in January — but there are some caveats. Strong job market boosted spending, keeping inflation elevated. Weather, one-off factors may play a role in strength of data. (Bloomberg, February 24, 2023, https://www.bloomberg.com/news/articles/2023-02-24/us-economy-came-in-hot-in-january-though-data-have-some-caveats?srnd=economics-v2)
IMF urges Central Banks to ‘Stay the Course’ till prices tamed. China reopening at pace that’s exceeded expectations, IMF says. Russia’s war still casts long shadow on global economy: IMF MD (Bloomberg, February 25, 2023, https://www.bloomberg.com/news/articles/2023-02-25/imf-urges-central-banks-to-stay-the-course-till-prices-tamed?srnd=economics-v2)
A one-way market foils stock pickers as Fed trounces everything. Repricing of expectations for rates overshadows other factors. Growth, value stocks moving in lockstep by most since 2005 (Bloomberg, February 25, 2023, https://www.bloomberg.com/news/articles/2023-02-25/a-one-way-market-foils-stock-pickers-as-fed-trounces-everything)
Bets on the year of the bond are still on even as losses return. Inflation, strong growth cause bond-market reset in February. While year’s gains erased, longer-term outlook seen supportive. (Bloomberg, February 25, 2023, https://www.bloomberg.com/news/articles/2023-02-25/year-of-the-bond-mantra-s-sparking-fear-of-missing-out-buying-hits-a-snag?srnd=economics-central-banks)