{"id":1472,"date":"2019-03-12T14:51:50","date_gmt":"2019-03-12T18:51:50","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1472"},"modified":"2019-03-12T14:51:50","modified_gmt":"2019-03-12T18:51:50","slug":"february-consumer-prices-real-earnings-and-small-business-confidence","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1472","title":{"rendered":"February Consumer Prices, Real Earnings and Small Business Confidence"},"content":{"rendered":"\n

INDICATOR:<\/strong> February Consumer Prices, Real Earnings and Small Business Confidence<\/strong><\/p>\n\n\n\n

KEY DATA:<\/strong> CPI: +0.2%; Over-Year:\n+1.5%; Ex-Food and Energy: +0.1%; Over-Year: +2.1%\/ Real Earnings: +0.3%;\nOver-Year: +1.9%\/ NFIB: +0.5 point<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cModest inflation and tight labor markets are\nhelping drive up worker spending power, which hopefully will keep the expansion\ngoing.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  With the world economy slowing and\nuncertainty about trade continuing to restrain business decision making,\nsomething needs to improve if the economy is to pick up some steam.  Well, that just may be household spending\npower and modest inflation is helping<\/em><\/strong> that along.  The Consumer Price Index rose moderately in\nFebruary, led by increases in energy and to a lesser extent, gains in food,\napparel and shelter costs.<\/em><\/strong>  On\nthe other hand, medical goods and used vehicle prices dropped sharply, as did\nenergy services costs.  Excluding food\nand energy, prices rose minimally. Over the year, consumers have had to deal\nwith very limited inflation pressure<\/em><\/strong>s, though they increased somewhat\nmore moderately when food and energy were taken out of the mix.  Nevertheless, there are few signs that\ninflation pressures are building.<\/em><\/strong><\/p>\n\n\n\n

Household spending power is determined by both wage\ngains and inflation.  Inflation is tame;\nWage gains are not.<\/em><\/strong>  Hourly wage costs jumped in\nFebruary, rising 3.4%, the fastest pace in a decade.  When inflation was factored in, the increase\nis pushing 2%, something we haven\u2019t seen in four years.  Back then, inflation was largely flat.  <\/p>\n\n\n\n

The National Federation of Independent\nBusinesses reported that small business confidence is stabilizing after having\nbeen bashed by the economic slowdown and the government shutdown.<\/em><\/strong>  The index peaked in August and declined\nconsistently until it edged up in February. \n
\nA number of categories posted increases, including general business conditions\nand the outlook for expansion, but earnings were still weak and sales are\ngoing nowhere.<\/em><\/strong>  These data bounce\naround and the modest rise in February may not be a signal that conditions are\nstarting to improve.  It could just be an\nimprovement due to the government shutdown ending.  Let\u2019s wait a couple of months to see if this\nwas a start of an upward trend or just a temporary rebound.  <\/em><\/strong><\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  In general, the\neconomic data have indicated that growth moderated fairly sharply at the end of\nthe year.  The consumer really didn\u2019t\nspend a lot of money and that is not good news for future growth.<\/em><\/strong>  But households have more money to spend and it\nis not being eaten away by inflation. \nThat implies we should be able to sustain moderate growth in the spring.<\/em><\/strong>  Unfortunately, there is simply nothing out there\nthat says the economy will accelerate sharply. \n <\/em><\/strong>It is hard to see what\ncould give investors the green light other than a trade agreement that is much\nmore than puff pastry.  That puts\npressure on to not only get something done, but to get a real change in the\nterms of trade between the U.S. and China. \nIf we wind up with more puff than pastry, investors may exhale for a\nwhile, but reality could settle fairly quickly. \nGiven all the uncertainty, the Fed is likely to make believe it is the\nsecond coming of Rip Van Winkle and go to sleep for quite a while.<\/em><\/strong>  The members are in no rush to move (from\nunder the covers).  <\/p>\n","protected":false},"excerpt":{"rendered":"

INDICATOR: February Consumer Prices, Real Earnings and Small Business Confidence KEY DATA: CPI: +0.2%; Over-Year: +1.5%; Ex-Food and Energy: +0.1%; Over-Year: +2.1%\/ Real Earnings: +0.3%; Over-Year: +1.9%\/ NFIB: +0.5 point IN A NUTSHELL:  \u201cModest inflation and tight labor markets are helping drive up worker spending power, which hopefully will keep the expansion going.\u201d WHAT IT … Continue reading February Consumer Prices, Real Earnings and Small Business Confidence<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1472","post","type-post","status-publish","format-standard","hentry","category-economic-indicators"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1472"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1472\/revisions"}],"predecessor-version":[{"id":1473,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1472\/revisions\/1473"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}