Relevant and even prescient commentary on news, politics and the economy.

Expect a core CPI of 2% this year.

My discovery that half the annual increase in the not seasonally adjusted core CPI occcurs in the first quarter and that simply doubling the first quarter increase gives you an amazingly accurate estimate of the December to December reading work again in 2018. In 2019 it is saying the annual increase in the core CPI […]

2019 Core CPI

In a low inflation world firms tend to raise prices once a year, typically in the first quarter of the calendar year or their fiscal year.   Because of this very strong seasonal pattern, on a not seasonally adjusted  around 50% of the annual increase in the core CPI —  excluding food and energy — occurs […]

Wage Growth

Based on my wage equation, last January I warned to expect a sharp acceleration in wage growth in 2018.  Now that wage growth has risen       from 2.4% in 2017 to 3.4% in 2018, the same economic variables imply that wage growth may be flattening out.  If wage growth remains near    current […]

Effective Tax Rates

Along with fourth quarter  GDP, corporate profits for the the fourth quarter was also reported.  Profits growth was either quite strong or very weak depending on how you looked at them.  On a year over year basis, after tax profits growth was 11% and appeared to be accelerating. However, on a quarter to quarter basis […]

Trump’s Emergency and the Wall

I presume that Trumps Emergency is strictly political theater as it will be tied up in the courts for the next couple of years. Trump has no problem with this as he can tell his base that it is working and they will accept his story. Now I’lljust wait and see the response to this […]

Stock Market Valuation

Trump is blaming the Fed for the recent poor stock market performance. For once, he may be right. The recent market plunge took the stock market PE from the top of my fair value band through the bottom. The last observation is the 14 December close. The fitted PE has is a function of both […]

June real trade balance

When the second quarter real GDP report was published I saw that trade made a major contribution to growth — exports contributed 1.12 percentage points of the 4.1% real GDP growth.  But that seemed like some sort of fluke produced by unusual conditions rather that what trend growth would generate.  Moreover, the BEA estimate was […]

Revised real GDP growth

Along with the second quarter GDP report the BEA also published the results of its regular revision of the last five years of data.  The most significant revision was to the measure of price changes in the high tech arena. This showed that business investment had been somewhat stronger than previously reported, but it only […]


Remember, a tariff  is a tax. So we have a republican president trying to solve problems by raising taxes. Has anyone told Grover Norquist ?