US economic growth remained “above trend” last month, according to the Chicago Fed National Activity Index, a weighted average of 85 indicators. For the fourth consecutive month, the three-month average of the index (CFNAI-MA3) posted a reading above zero: +0.09 in February. That’s a modest slowdown from January’s revised +0.28, although the dip is in line with last week’s econometric forecast. In any case, the main takeaway is clear: recession risk was low as of last month.
Daily Archives: March 25, 2013
Don’t Overlook The US Dollar Factor For Oil Prices
It’s no secret that oil prices and the US dollar exchange rate have an economically robust relationship. The global market for crude oil, after all, is generally priced in greenbacks. It would certainly be surprising if there was no link between the world’s most important commodity and the planet’s reserve currency. But if this connection is conspicuous and inevitable, it’s not always fully appreciated, according to a new study that aims to remind readers of the historical record. “An appreciation (depreciation) of the dollar exchange rate is typically accompanied by a decline (rise) in both global oil prices and oil production, indicating a fall (rise) in global oil demand,” write two economists from Ghent University in “The U.S. Dollar Exchange Rate and the Demand for Oil.”