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  • Consumer Price Index On The Rise

    The Consumer Price Index for All Urban Consumers rose 0.2% in March, according to the Bureau of Labor Statistics . 0.2 doesn't look so big, but the news comes after two straight months of 0.1% growth.The CPI-U has grown in ten of the last eleven months. The all items index has grown 1.5% over the last 12 months. From the Bureau of Labor Statistics release: Increases in the shelter and food indexes accounted for most of the seasonally adjusted all items increase. The food index increased 0.4 percent in March, with several major grocery store food groups increasing notably. The energy index, in contrast, declined slightly in March as decreases in the gasoline and fuel oil indexes more than offset increases in the indexes for electricity and natural gas. The index for all items less food and energy also rose 0.2 percent in March. Besides the 0.3 percent increase in the shelter index, the indexes for medical care, for apparel, for used cars and trucks, and for airline fares also increased. The indexes for household furnishings and operations and for recreation both declined in March. The all items index increased 1.5 percent over the last 12 months; this compares to a 1.1 percent increase for the 12 months ending February. The index for all items less food and energy has increased 1.7 percent over the last 12 months, as has the food index. The energy index has risen slightly over the span, advancing 0.4 percent. Here's a look at the CPI for All Urban Consumers over the last year: Read the full release here .
  • A New Primer on China From McKinsey

    Do you have an hour for China? That is, do you have an hour you can spare to understand the leading economic story of the century? McKinsey's Jeffrey Towson and Jonathan Woetzel have written The One Hour China Book in an effort to bring us all up to speed on the key pieces to understanding what is happening in the world's most populous country and the impact of activity there on life everywhere. If you can't spare an hour just yet, here are the "six big trends" from the book, as shared at McKinsey Insights : Here's a little more on trend number 3: The American middle class was the world economy’s growth engine throughout the 20th century. Now, the engine is the Asia–Pacific region, which will account for two-thirds of the world’s middle class by 2030. While Chinese consumers’ focus on “value for money” has driven the rise of companies such as apartment builder China Vanke and Tingyi Holding Company—the business behind China’s dominant instant-noodle brand—buying habits are changing. As urbanization accelerates, consumer spending is becoming more like that of the West’s middle class. Urban Chinese are shopping to meet emotional needs, driving a skyrocketing demand for middle-class goods, food, and entertainment. As an example, China consumed more than 13 million tons of chicken in 2012—more than the United States. Tyson Foods’s China operations has facilities able to process more than three million chickens per week, and Chinese chicken consumption, which grew by 54 percent from 2005 to 2010, is expected to grow an additional 18 percent annually during the next five years. For additional evidence, look no further than the fact that the largest Chinese acquisition of a US company had nothing to do with technology, cars, or energy. In 2013, Chinese Shuanghui International spent $7.1 billion to buy American Smithfield, the world’s largest pork producer and processor. It’s not surprising, then, that agribusiness is one of China’s hottest new industries. Almost every aspect needs to be improved, from land and water use to logistics and retail. Legend Holdings, the parent company of Lenovo, now lists modern agriculture as one of its five core areas, with a portfolio that includes kiwi and blueberry farming. Read All you need to know about business in China here .
  • Zachary Karabell on Making Statistics More Meaningful

    Zachary Karabell is on a quest. He wants us to have a healthier relationship with economic statistics. And that means not placing too much pressure on those statistics to tell us more than they are designed to. In his latest book, The Leading Indicators: A Short History of the Numbers That Rule Our World , Karabell knocks some of the magic shine off of GDP and other key data that we follow closely. He recently spoke about GDP, income per capita, and other headline stats at the Carnegie Council . Here is an excerpt: For more information on the event, and to listen to the full talk, click here .
  • Personal Income and Spending Continue to Climb

    Personal income is steadily rising, according to the Commerce Department . Income and disposable personal income both rose by 0.3 percent in February, after rising 0.2% in January. Spending is just a step behind income (perhaps as it should be). Real consumer spending rose 0.2% after rising 0.1% in January. Take a look at the monthly change: From the Bureau of Economic Analysis release: Private wages and salaries increased $13.0 billion in February, compared with an increase of $17.2 billion in January. Goods producing industries' payrolls increased $5.2 billion in February and were unchanged in January; manufacturing payrolls decreased $0.3 billion in February, compared with a decrease of $2.8 billion in January. Services-producing industries' payrolls increased $7.8 billion, compared with an increase of $17.3 billion. Government wages and salaries increased $2.0 billion, compared with an increase of $1.2 billion. Read the BEA's full report here .
  • Charities Aid Foundation Ranks U.S. As Most Charitable Nation

    Ted Hart , the CEO of the the American branch of the Charities Aid Foundation , recently heralded the giving record of Americans in an article for the Stanford Social Innovation Review . "Americans give more to charity, both overall, and per capita, than any other nation," Hart writes. He goes on to note that Americans are also more engaged in charitable activity than people in any other country, based on CAF's measurements, which you can find at the end of the CAF's World Giving Index . One has to be careful not to equate charitable giving with caring for others, as the different social spending records of countries based on their tax structures surely has to be considered, but that should not take away the value of watching the trends within countries. And it appears the recovery in giving in the U.S. has outpaced GDP growth post-recession. You can read the full report here . Many of the key findings are in this infographic:
  • Pew: Americans Remain Bearish About the Economy

    Americans don't seem to be letting traditional economic indicators get in the way of their feelings about the economy. Andrew Kohut --Founding Director of the Pew Research Center --looks at some of the latest survey data he and his team has gathered, and calls citizens' "bearish" views of the economy as a big puzzle. As the new year began, the Associated Press summed up the optimistic outlook of experts succinctly: “Consumers will spend more. Government will cut less. Business will invest more. And more companies will hire.” In that regard, the Bureau of Labor Statistics first report of the year showed that the unemployment rate fell to a five-year low of 6.7 percent, and essentially remained at that level in February. But even so, much of the American public is still not over the Great Recession. And the factors that drive economic pessimism are not easily mitigated. Surveys show that a complex combination of partisanship and widening socio-economic gaps are in play, undermining chances of an improvement in the public mood any time soon. At the outset of what appeared to be a brightening economic climate, the Pew Research Center’s January national survey found just 16% of the public rating the national economy as excellent or good while a whopping 83% rated it as only fair or poor. This is little different than a year earlier when the survey found 12% giving the economy a positive rating and 86% rating it negatively. In fact, this is only modestly better than at any point since the onset of the Great Recession. The same pattern is seen in how Americans size up their personal finances. While Americans have a better opinion of their own finances than of the national economy, ratings of personal financial well-being remain well below what they were pre-recession. In 2007, and for much of the decade before it, about half of Americans rated their finances as excellent or good. Today, just 39% do. While there is a significant split on Americans' views about the economy based on political party affiliation, the split on personal finance issues is based on what Pew terms an education gap: Read the full article here .
  • The Long View on Rising, Rising, Productivity in U.S.

    Forget about a chart of the day. At their House of Debt blog, Atif Mian and Amir Sufi share what they say is the most important economic chart on the U.S. economy. Period. Here it is: Note that blue line. Productivity has skyrocketed since 1947. A "spectacular achievement by an advanced econonomy," note Mian and Sufi: The gains in productivity were quite widely shared from 1947 to 1980. Real income for the median U.S. family doubled during this time just as output per hour of work performed doubled. The rising tide was lifting all boats. However, what we want to focus on today is the remarkable separation in productivity and median real income since 1980. While the United States is producing twice as much per hour of work today compared to 1980, a small part of the gain in real income has gone to the bottom half of the income distribution. The gap between productivity and median real income is at an historic all-time high today. Read the full post here . And we'll keep an eye on House of Debt for ongoing analysis. (Hat tip Mark Thoma )
  • Retail Sales Rebound in February

    After a rough January for retailers, consumers picked up the purchasing pace in February, as retail sales improved, according to the latest data from the Commerce Department . Advance estimates for U.S. retail and food services came in at $427.2 billion, a 0.3% increase over January. Sales were up 1.3% over February 2013. From the Census Bureau : Bloomberg 's Victoria Stilwell reports that the retail data was welcome news and exceeded economists' expectations by 0.1%. Read the release here .
  • The Case for Measuring Gross National Disposable Income

    GDP gets all the attention of the media, but there are limits to relying on it as the measure of economic progress. GNI, or Gross National Income, is another measure, and one that is popular with a lot of economists. But for some countries, it doesn't include all of the funds coming in to a nation's people. Clara Capelli and Gianni Vaggi , of the University of Pavia, argue that we should pay more attention to GNDI, or Gross National Disposable Income. From Vox : Traditionally, the Gross Domestic Product is the most widely accepted indicator of an economy’s size and performance, although in the last decades many contributions have suggested to adopt alternative tools to measure people’s wellbeing (see Stiglitz, Sen, and Fitoussi 2008). The Gross National Income (GNI) is largely considered a better indicator to account for the income available to the dwellers of a country because it captures the incomes related to the mobility of factors of production (wages earned by cross-border workers, repatriated profits and dividends, etc.), the so-called Net Primary Incomes (NPI), in the Systems of National Accounts (see UN 2008 and IMF 2009). However, GNI does not include unilateral transfers such as foreign aid and, most importantly, remittances: the so called Net Secondary Incomes (NSI). GNI accounts for the income of cross-border workers – the so called compensation of employees – but not for the money sent home by those who live and work abroad for more than one year, which are by far the largest share of remittances. Remittances have increased by approximately seven times between 1990 and 2010 (see the World Bank database); they now represent one of the largest types of monetary inflows for many developing countries and in some developing countries they can be as high as 20% of GDP. Unilateral transfers are recorded by a third indicator, the Gross National Disposable Income (GNDI), which includes both primary and secondary distribution of income. GNDI provides a much better indicator than the GNI of the living standard of the people of a country and in many cases it should substitute for the latter measure. However the GNDI is not easily available in major international reports and databases. The OECD calculates GNDI for its members and for some non-member countries such as China and Indonesia. Furthermore, GNDI is sometimes confused with GNI in common practice (see for instance Todaro and Smith 2011, page 54). Read A better indicator for standard of living: The Gross National Disposable Income here .
  • Gallup Economic Confidence Index Level in February, Remains at Pre-Shutdown Level

    Americans' confidence in the economy remained flat in February. Confidence had plummeted in October with the partial shutdown of the federal government, but recovered significantly in the three months following. Gallup 's Economic Confidence Index : is now at -16, roughly where it was last spring when it began a climb to a 5 year peak of -7. Here's a look at the monthly averages since the start of 2008: From the report: The end of consecutive monthly climbs in Gallup's Economic Confidence Index is not an auspicious sign, particularly as Americans remain more negative than positive about the economy overall. After the government shutdown wreaked havoc on Americans' confidence in both the government and the economy in October, a parade of monthly improvements offered some hope that economic confidence might finally escape negative territory. But the readings have plateaued at the pre-shutdown level -- in other words, they are back to "normal." However, if 2014 is anything like 2013, good things could be in store as the seasons change. Last spring and summer saw some of the highest economic confidence index readings Gallup has recorded since it began tracking these measures in 2008. And with contentious gridlock on fiscal matters temporarily out of the way for the president and Congress, political sideshows should be less of a threat to economic confidence in the near future, giving confidence a fighting chance of reaching positive territory.; Read the full release here .
  • CPI Continues Steady Rise

    The Consumer Price Index for All Urban Consumers rose 0.1% in January, according to the Bureau of Labor Statistics . The CPI-U has grown in eight of the last nine months (in October it came in at 0.0). The all items index has grown 1.6% over the last 12 months. From the Bureau of Labor Statistics release: Increases in the indexes for household energy accounted for most of the all items increase. The electricity index posted its largest increase since March 2010, and the indexes for natural gas and fuel oil also rose sharply. These increases more than offset a decline in the gasoline index, resulting in a 0.6 percent increase in the energy index. The index for all items less food and energy also rose 0.1 percent in January. A 0.3 percent increase in the shelter index was the major contributor to the rise, but the indexes for medical care, recreation, personal care, and tobacco also increased. In contrast, the indexes for airline fares, used cars and trucks, new vehicles, and apparel all declined in January. The food index rose slightly in January. The index for food at home rose 0.1 percent, with major grocery store food groups mixed. The all items index increased 1.6 percent over the last 12 months; this compares to a 1.5 percent increase for the 12 months ending December. The index for all items less food and energy has also risen 1.6 percent over the last 12 months. The energy index has risen 2.1 percent over the span, and the food index has increased 1.1 percent. Here's a look at the CPI for All Urban Consumers over the last year: Read the full release here .
  • Federal Open Market Committee Policy Action From the January Meeting Minutes

    The Federal Reserve released the minutes from the January Federal Open Market Committee meeting yesterday. While we already knew the big takeaway from the meeting-- the plan to the Fed's bond-buying quantitative easing program by roughly $10 billion --the minutes allow bankers, investors, and policymakers around the world to get a sharper view of the FOMC's collective thinking. Here are a few key paragraphs from the minutes on policy action: Committee members saw the information received over the intermeeting period as indicating that growth in economic activity had picked up in recent quarters. Labor market indicators were mixed but on balance showed further improvement. The unemployment rate had declined but remained elevated when judged against members' estimates of the longer-run normal rate of unemployment. Household spending and business fixed investment had advanced more quickly in recent months than earlier in 2013, while the recovery in the housing sector had slowed somewhat. Fiscal policy was restraining economic growth, although the extent of the restraint had diminished. The Committee expected that, with appropriate policy accommodation, the economy would expand at a moderate pace and the unemployment rate would gradually decline toward levels consistent with the dual mandate. Moreover, members continued to judge that the risks to the outlook for the economy and the labor market had become more nearly balanced. Inflation was running below the Committee's longer-run objective, and this was seen as posing possible risks to economic performance, but members anticipated that stable inflation expectations and strengthening economic activity would, over time, return inflation to the Committee's 2 percent objective. However, in light of their concerns about the persistence of low inflation, many members saw a need for the Committee to monitor inflation developments carefully for evidence that inflation was moving back toward its longer-run objective. In their discussion of monetary policy in the period ahead, all members agreed that the cumulative improvement in labor market conditions and the likelihood of continuing improvement indicated that it would be appropriate to make a further measured reduction in the pace of its asset purchases at this meeting. Members again judged that, if the economy continued to develop as anticipated, further reductions would be undertaken in measured steps. Members also underscored that the pace of asset purchases was not on a preset course and would remain contingent on the Committee's outlook for the labor market and inflation as well as its assessment of the efficacy and costs of purchases. Accordingly, the Committee agreed that, beginning in February, it would add to its holdings of agency mortgage-backed securities at a pace of $30 billion per month rather than $35 billion per month, and would add to its holdings of longer-term Treasury securities at a pace of $35 billion per month rather than $40 billion per month. While making a further measured reduction in its pace of purchases, the Committee emphasized that its holdings of longer-term securities were sizable and would still be increasing, which would promote a stronger economic recovery by maintaining downward pressure on longer-term interest rates, supporting mortgage markets, and helping to make broader financial conditions more accommodative. The Committee also reiterated that it would continue its asset purchases, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. In considering forward guidance about the target federal funds rate, all members agreed to retain the thresholds-based language employed in recent statements. In addition, the Committee decided to repeat the qualitative guidance, introduced in December, clarifying that a range of labor market indicators would be used when assessing the appropriate stance of policy once the unemployment rate threshold had been crossed. Members also agreed to reiterate language indicating the Committee's anticipation, based on its current assessment of additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments, that it would be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee's longer-run objective. Read the full release here .
  • An Optimistic Take on Japan's Weaker Than Expected GDP Data

    Japan's economy grew at a disappointing rate to close 2013, expanding at an annualized rate of 1 percent during the fourth quarter. That has some analysts disappointed and worried about the short term prospects for Japan, but not Dalju Aoki . Aoki, economist for UBS, tells the Wall Street Journal's Deborah Kan that he is still optimistic about growth in Japan this year. And he explains what he looks at as helpful economic indicators:
  • Treasury Secretary Lew on the "End" of Too Big to Fail

    Treasury Secretary Jacob Lew is feeling good about the economy. In an interview with Charlie Rose last night, Lew expressed optimism that growth will pick up in 2014, and though he tended to remain cautious about his predictions, he suggested that our elected officials in Washington are making progress in economic policy around debt and immigration. Rose and Lew covered a lot of ground--from domestic issues to emerging markets and China. In this excerpt, Lew argued that banking rules are significantly stronger now than they were six years ago: We will post the full video when it becomes available. See also: Damian Paletta 's "12 Takeaways" from the interview at the Wall Street Journal Washington Wire blog, here .
  • WSJ News Hub: 2013 A Big Year for IPOs

    If the number of IPOs is a strong economic indicator, then we have further proof that the great recession was a rough stretch. The Wall Street Journal 's Dan Strumpf says the IPO market from 2008 through 2012 was "essentially dead." Well, it came back to life in a big way last year, and Strumpf explains some of the key factors in the growth of new publicly traded companies:
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