Consumer Prices in U.S. Probably Rose in May at Slowest Pace in Six Months
Bloomberg | June 15
The cost of living in the U.S. probably rose in May at the slowest pace in six months as fuel costs waned, economists said before a report today. The consumer-price index increased 0.1 percent after a 0.4 percent gain in April, according to the median forecast of 79 economists surveyed by Bloomberg News. The so-called core measure, which excludes more volatile food and energy costs, may have increased 0.2 percent for the fourth time in five months.
Retail Sales Slip In May
Retail sales fell a modest 0.2% last month on a seasonally adjusted basis, the Census Bureau reports. That’s the first monthly decline in nearly a year. Given the recent weakness in several economic reports, no one needs an excuse to see today’s retail sales news as a sign of trouble ahead. Fair enough, although there’s still room for debate. As troubling as the number du jour is, the broader context for retail sales remains quite positive. That may or may not be decisive, but it’s something.
Strategic Briefing | 6.14.2011 | U.S. Retail Sales (May)
The update for U.S. retail sales for May arrives later this morning, offering a new data point for deciding if the economy’s slowing, and if so, by how much? Retail sales for April rose 0.5% (seasonally adjusted). The consensus forecast for May calls for a drop of 0.7%, according to Briefing.com. Here’s what analysts have been writing recently in anticipation of today’s retail sales report:
Four Scenarios For The US Retail Sales Report
ActionForex | June 14
Tuesday’s key report from the US will be the May retail sales figures. With consumer spending making up a majority of the economy, gauging US spending will give us an important read on the health of the recovery. Will May show consumers curtailing spending in May? We already know that consumers bought less cars in May, and therefore the headline retail sales number will be weak. Overall sales are expected to decline 0.3%, after a 0.5% gain in April.
Asset Allocation, Risk Premia & Sharpe Ratios | May 2011 Update
The big shift in the mix for the Global Market Index (a proprietary benchmark that uses a passive weighting of all the major asset classes) over the past year has been a drop of nearly three percentage points for U.S. bonds and the same for foreign developed-market government fixed income. Meantime, the leading increase in relative terms for the 12 months through this past May has been a rise in the weighting for foreign-developed market stocks. As the table below shows, equities in mature markets added more than two percentage points to their collective allocation in GMI for the year through last month.
Macro & Markets Roundtable Discussion…
Strategic Briefing | 6.13.2011 | U.S. GDP Forecasts
Sluggish Hiring Seen as a Threat to Recovery
The Wall Street Journal | June 13
The potential for a persistent slowdown in hiring is the biggest threat to the U.S. recovery, according to economists in the latest Wall Street Journal economic forecasting survey, as they sharply cut the number of jobs they projected the economy would create in coming months… In the latest survey, the economists lowered their forecasts for second-quarter growth in gross domestic product to 2.3% at a seasonally adjusted annual rate—down from last month’s forecast of 3.2%. However, they see growth perking up to 3.3% in the second half of 2011.
Second Half 2011 U.S. Growth Rebound Intact, Economists Say
Bloomberg | June 10
Slowdowns in consumer spending and employment will prove temporary, giving way to a U.S. growth rebound in the second half of 2011, economists surveyed by Bloomberg News said. After growing at a 2.3 percent annual pace this quarter, the world’s largest economy will expand at a 3.2 percent rate from July through December, according to the median forecast of 67 economists polled from June 1 to June 8.
Book Bits For Saturday: 6.11.2011
● Winning at Risk: Strategies to Go Beyond Basel
By Annetta Cortez
Excerpt via publisher, Wiley
Since risk plays an absolutely crucial role in a financial institution’s very existence, you would expect it would know virtually everything about risk. You would expect all of the institution’s executives, managers, and employees to possess a strong understanding of risk, and you would expect the institution to have specialists in every aspect of measuring and managing risk. You would also expect the institution to have developed a common language for discussing and evaluating risk with maximum clarity and transparency. Chances are good, however, that reality would not live up to your expectations. Not because your expectations are unreasonable; in fact, they are quite reasonable… You can’t really understand finance unless you understand risk. You can’t just skip over the risk component of finance. That would be like taking an advanced class in molecular biology without first understanding basic chemistry. It ain’t gonna happen—or if it does, watch out. And that’s why risk management must be a core competency and primary capability of every financial institution. Instead, risk management is often considered a burden, something that controls and restricts legitimate business activities without adding any real value.
A New Survey On The Economy Offers A Bit Of Optimism
The economic news in recent weeks suggests that the recovery has hit a rough patch, but at least one forward-looking review of the macro trend says the rearview mirror may be misleading. The 35 economists in yesterday’s update of the biannual Livingston Survey—the longest-running continuous set of predictions by dismal scientists—see moderately improving conditions in the second half of this year.
Jobless Claims Inched Higher Last Week
If you’re inclined to optimism, you can argue that today’s update on initial jobless claims isn’t signaling a new recession after all. True, new filings for jobless benefits rose slightly last week by 1,000 to a seasonally adjusted 427,000. That’s still too high to encourage forecasts of robust growth in either the labor market or the economy overall. But for the moment, the number du jour doesn’t provide much support for arguing that the recent stumble in the economy is getting worse. The trend isn’t necessarily getting better either, unfortunately, which leaves us betwixt and between and waiting for the next update.
Kansas City Fed: Financial Stress Fell In May
Economic growth appears to be slowing, as recent indicators suggest, but the financial markets are keeping a stiff upper lip. Credit markets don’t look particularly anxious, at least not yet, and the same can be said for the stock market, despite its recent wobbles. Additional support for the bright side via markets arrived with yesterday’s update of the Kansas City Fed’s Financial Stress Index (KCFSI).