An Emerging Policy Dilemma
March 28, 2025 The consumer spending data for February combined with modest downward revisions to earlier months suggest GDP will rise only about 0.5% in the first quarter. A large portion of the first quarter weakness reflects a surge in imports as firms tried to...
GDP, Inflation, and Interest Rate Forecasts
March 28, 2025 We expect the funds rate to remain at 4.3% at the end of this year. We expect GDP growth in the first quarter of 0,5% and 2.0% GDP growth in 2025. Given the GDP forecast above, we expect the unemployment rate to be steady at the 4.1% mark at the end...
Personal Income and Consumption Expenditures — Monthly
March 28, 2025 Personal consumption expenditures rose 0.4% in February after having fallen 0.3% in January. In the past year nominal spending has risen 5.3% What we are really interested in is "real" or inflation-adjusted spending. That is what goes into the GDP...
Personal Consumption Expenditures Deflator
March 28, 2025 There are many different measures of inflation, but the one that the Federal Reserve considers to be most important is the personal consumption expenditures deflator, in particular the PCE deflator excluding the volatile food and energy components....
Pending Home Sales
March 27, 2025 Pending home sales rose 2.0% in February to 72.0 after having fallen 4.6% in January. The National Association of Realtors chief economist, Lawrence Yun said, “"Despite the modest monthly increase, contract signings remain well below historical...
GDP
March 27, 2025 . The final estimate of fourth quarter GDP was 2.4% versus the preliminary estimate of 2.3% which was identical to the advance estimate. This compares to GDP growth of 3.1% in the third quarter. Growth in the past year has been 2.5% Final sales,...
Final Sales
March 27, 2025 When the economy is slowing down, firms will accumulate unwanted inventories. Those inventories still show up in GDP, but they are unsold. Hence, GDP will be biased upwards. Similarly, in good times businesses will reduce inventory levels to...
Final Sales to Domestic Purchasers
March 27, 2025 It is important to remember that final sales is a measure of how many domestically produced goods are sold each quarter. But we also sell goods overseas -- our exports. And we purchase goods from other countries -- our imports. In the never-ending...
Gross Domestic Purchases Deflator
March 27, 2025 There are many different deflators that are available. This one is for gross domestic purchases which measures prices paid by U.S. residents. It is the one measure of inflation that the Commerce Department talks about when it releases the GDP...
Corporate Profits
March 27, 2025 Corporate profits from current production (corporate profits before tax with inventory valuation and capital consumption adjustments) rose by $204.7 billion in the fourth quarter which works out to an an increase of 5.4% after after having fallen...
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