{"id":1549,"date":"2019-06-13T12:00:27","date_gmt":"2019-06-13T16:00:27","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1549"},"modified":"2019-06-13T12:00:27","modified_gmt":"2019-06-13T16:00:27","slug":"may-import-and-export-prices-and-weekly-jobless-claims","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1549","title":{"rendered":"May Import and Export Prices and Weekly Jobless Claims"},"content":{"rendered":"\n

KEY DATA:<\/strong> Imports: -0.3%; Nonfuel:\n-0.3%; Exports: -0.2%; Farm: -1.0%\/ Claims: +3,000<\/p>\n\n\n\n

IN A\nNUTSHELL:<\/strong>  \u201cMaybe the Hubble telescope can find\ninflation, but I can\u2019t.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  Well, another inflation number, another sign\nthat inflation is going nowhere.  Import\nprices fell in May.<\/em><\/strong>  We knew that\nenergy costs were down, so the drop was hardly a surprise.  What was surprising was the broad based\nnature of the decline in the costs of imported products.  Food, non-petroleum industrial supplies,\ncapital goods and vehicles all posted negative numbers.  The only outlier, if you can really put it\nthat way, was consumer products, which were flat.<\/em><\/strong>  In other words, prices of all the major\nproducts groups were either flat or down in May.  Part of the drop comes from the strong\ndollar, which has started to slip.  But\nit could be months to see any change. \nAlso, tariffs are not part of the imported goods price.<\/em><\/strong>  They are paid by the importer based on the\ncost of the imported product.  On the\nexport side, we saw a similar pattern. \nAlmost every category posted declining prices, with agricultural\nproducts leading the way.  Farmers are\nsuffering the most from the trade war and loss of markets and we see them in\nthe prices, which are down by 4.6% over the year.  <\/p>\n\n\n\n

Jobless claims rose a touch last week, but as usual,\nthat is hardly anything to worry about. <\/em><\/strong> The\nnumber may not be at historically low levels, but it is not that far away.  <\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  There\nare all sorts of cries for rate cuts, but don\u2019t expect that to happen\nsoon.  While inflation may be below\ntarget, growth and the unemployment rate are not.  <\/em><\/strong>Could the Fed lower rates and not\nrisk igniting inflation?  Maybe a little,\nbut what\ngood would one or two cuts do?  Long\nrates have already plummeted and there hasn\u2019t been any major uptick in housing\nsales.  And its not as if businesses\ndon\u2019t have the capital or the tax incentives to invest already.<\/em><\/strong>  Will they really decide to increase capital\nspending if short-term rates go down?  Wouldn\u2019t\nrate cuts send the message that the Fed is worried about growth? What would\nthat say about the prospects of stronger growth going forward that would be\nneeded to make the investment profitable? \nAnd if the Fed does lower rates and it accomplishes little other than\nsupporting the equity markets, as I suspect it would, there would be even fewer\narrows in the Fed\u2019s quiver to fight the next real slowdown.<\/em><\/strong>  We will get some information abut the Fed\u2019s\nthinking from next weeks FOMC statement and the Chair\u2019s press conference, but I\nam not sure there is a whole lot of consensus on the Fed.  Its not as if the economy is falling off the\ncliff, even if second quarter does come in low. \nMy view is that a rate cut now is not needed and it would only be done\nto satisfy the lust in the equity markets, and that is just not good\nenough.   <\/em><\/strong>The Fed should stick to dealing with\nits dual mandate and skip the Jerome Powell created third one, maximizing\nequity values.    <\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Imports: -0.3%; Nonfuel: -0.3%; Exports: -0.2%; Farm: -1.0%\/ Claims: +3,000 IN A NUTSHELL:  \u201cMaybe the Hubble telescope can find inflation, but I can\u2019t.\u201d WHAT IT MEANS:  Well, another inflation number, another sign that inflation is going nowhere.  Import prices fell in May.  We knew that energy costs were down, so the drop was … Continue reading May Import and Export Prices and Weekly Jobless Claims<\/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":[1],"tags":[],"class_list":["post-1549","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1549","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=1549"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1549\/revisions"}],"predecessor-version":[{"id":1550,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1549\/revisions\/1550"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}