econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 17 April 2016

Fed Faces Stagflation Lite

from Lakshman Achuthan, Co-Founder and Chief Operations Officer of ECRI

The cyclical downturn in U.S. economic growth that began more than a year ago remains intact. The evidence comes from the year-over-year (yoy) growth rate of ECRI's U.S. Coincident Index (USCI) - subsuming the aggregate measures of output, employment, income and sales that define the business cycle - which has been in a clear downtrend since the beginning of 2015 (blue line in graph below).

Meanwhile, yoy growth in the core PCE deflator turned up last summer and has since climbed to a three-year high (black line). Indeed, it is already approaching the Fed's 2% inflation target. The Fed pays attention to this measure because it is thought to better capture the inflation trend, being free from more "transitory" influences like food and energy price inflation. Yet, Fed Chair Janet Yellen is wary of acknowledging the possibility of a sustained rise in inflation, noting that, while "recent readings on inflation have moved up," she had not "yet concluded that we have seen any significant uptick that will be lasting," and expects the target to be reached only "over the next two or three years."

However, with USCI growth in a cyclical downswing (thick blue arrow) for over a year, and core PCE inflation in a cyclical upturn (thick gray arrow) for more than half a year, these are no temporary blips, especially in light of the U.S. Future Inflation Gauge hitting a 7½-year high. This is why we have been saying that the Fed is faced with what we might call "stagflation lite" (USCO Essentials, March 17, 2016). Given its dual mandate, this presents quite a policy conundrum for the Fed.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Theory of the Monetary Circuit: A Critique
The Expected Effects of Petitions to Improve the Monetary System
News Blog
August 2016 Median Household Income Has Declined From The Beginning Of The Year
August 2016 Pending Home Sales Index Declines?
24 September 2016 Initial Unemployment Claims: Rolling Averages Continue to Improve.
Third Estimate 2Q2016 GDP Revised Upward. Corporate Profits Down.
The Terrorist Networks At Our Fingertips
Infographic Of The Day: Dubai Interesting Statistics And Facts
Early Headlines: Asia Stocks Up, Oil Surges, OPEC Cuts Production, Student Loan Woes Mount, Trump Still Close, Aleppo Hospitals Bombed, Huge Wind Storm In Oz And More
The World's Most Sustainable Cities
Big Sam In Bad Company
Other Ways To Spend Your AirPod Budget
Crashing Space Station Shows Why China Must Start To Collaborate In Orbit
NFL Edges Towards A Full House In London
What We Read Today 28 September 2016
Investing Blog
Will Deutsche Bank Survive?
Banks Of Absurdity
Opinion Blog
The Federal Reserve Note
Trump, Trade And Taxes
Precious Metals Blog
War On Cash Turns To $20, $50, And $100 Bills
Live Markets
29Sep2016 Pre-Market Commentary: US Markets Expected To Open Lower, GDP Higher, Unemployment Lower, US Dollar Higher, Crude Prices Steady And Higher
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved