The Consumer Price Index report, released by the U.S. Bureau of Labor Statistics, provides the latest evidence that inflation is more or less in line with where the Federal Reserve Bank wants it to be. The Consumer Price Index for all urban consumers (CPI-U) declined by 0.1 percent in December. Over the last 12 months, the all items index increased by 1.9 percent before seasonal adjustment.
The seasonally adjusted decline was caused by a sharp decrease in the gasoline index, which fell by 7.5 percent in December, more than offsetting increases in other indexes including shelter, food, and other energy components. The energy index declined overall by 3.5 percent, as gasoline and fuel oil indexes fell, but natural gas and electricity indexes increased. Food indexes—food at home and food away from home—increased by 0.4 percent in December.
Core inflation—all items minus food and energy—rose 0.2 percent in December the same increase in both October and November. Indexes for shelter, recreation, medical care, and household furnishings and operations increased in December; in contrast, airline fares, used cars and trucks, and motor vehicle insurance declined during the month.
The all items index increased 1.9 percent over the last 12 months ending in December; marking the first time the 12-month change has been under 2.0 percent since August 2017. Core inflation rose 2.2 percent over the last 12 months. The energy index decreased by 0.3 percent, marking the first decline in the 12-month energy index since the period ending September 2016, while the food index increased by 1.6 percent over the last 12 months.
The full press release can be found via the link below.
Next release is Wednesday, February 13, 2019, for the January 2019 Consumer Price Index.
Nonfarm employers posted strong employment growth, adding 312,000 jobs; the unemployment rate rose slightly to 3.9 percent; and hourly wages posted continued growth in December. With an upward revision to the job growth reported for the prior two months, the three-month average was 254,000 jobs, more than the 220,000 average monthly rate for calendar year 2018.
Job gains occurred across a wide range of sectors in December including health care, food services and drinking places, construction, manufacturing, and retail trade. Health care added 50,000 jobs, largely among ambulatory health care services. Employment in food services and drinking places increased by 41,000. Construction added 38,000 jobs, manufacturing added 32,000 jobs, and retail trade added 24,000 jobs in December. Professional and business services with 43,000 jobs added in December, finished 2018 adding 583,000 jobs over the last 12 months. Health care added 346,000 year-over-year. Both continued to be the biggest drivers of job growth; with solid gains over the year also coming from manufacturing (284,000) and construction (280,000).
Despite strong nonfarm jobs growth, the unemployment rate increased to 3.9 percent in December, from 3.7 percent in November, as the strong labor market conditions pulled more people into the labor market. During the month, the labor force participation rate rose by 0.2 percentage points. The employment rate—or employment-to-population ratio (EPOP or the percentage of adults with jobs) remained unchanged in December at 60.6, a high for the recovery.
The tighter labor market is showing some dividends in wage growth. The average hourly wage is up 3.2 percent over the last year; over the last three months (October, November, and December), the annualized rate was up 3.2 percent. With the core rate of inflation at 2.2 percent, increased hourly wages translate to modest real wage gains.
In sum, this is mostly a positive jobs report. The pace of job growth that began seven years ago is continuing, with the economy adding a total of 2.6 million jobs during 2018. This growth rate is pulling more workers into the labor market, which is now tight enough to produce real wage gains.
The full BLS press release on the December 2018 employment situation can be accessed in the pdf below:
The next employment situation report for January 2019 will be released on Friday, February 1, 2019.
Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2018, according to the “third” estimate released by the Bureau of Econoimc Analysis. In the second quarter, real GDP increased 4.2 percent. The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 3.5 percent. With this third estimate for the third quarter, personal consumption expenditures (PCE) and exports were revised down, and private inventory investment was revised up; the general picture of economic growth remains the same. The increase in real GDP in the third quarter reflected positive contributions from exports and residential fixed investment. Imports, which are a subtraction to the calculation of GDP, increased. The deceleration in real GDP growth in the third quarter from the second primarily reflected a downturn in exports and decelerations in nonresidential fixed investment and PCE. Imports increased in the third quarter after decreasing in the second. These movements were partly offset by an upturn in private inventory investment.
On December 17, 2018, Administration Secretary Susanne Young released General Fund, Transportation Fund and Education Fund revenue results for the month of November and the first five months of the State’s 2019 fiscal year. Receipts activity across all three fund aggregates during the month of November were upbeat, with receipts in the General Fund and Transportation Fund tracking ahead of cumulative consensus expectations through November. Receipts in the Education Fund were also up versus expectations for the month of November, paced by an ahead of target monthly receipts performance in the Sales & Use Tax. November’s above-target level of receipts in the Sales & Use Tax was the first ahead of target monthly receipts performance of the 2019 fiscal year. Receipts overall in the Education Fund were down slightly for the fiscal year to-date, mostly due to the under-performance of the Sales & Use tax over the first four months of the 2019 fiscal year. Even so, revenues in the State’s Education Fund were only 1.0 percent below consensus expectations overall through November.
Click the pdf below to download Secretary Young’s most recent press release.
The Consumer Price Index report, released by the U.S. Bureau of Labor Statistics, provides the latest evidence that inflation is more or less in line with where the Federal Reserve Bank wants it to be. The Consumer Price Index for all urban consumers (CPI-U) was unchanged in November on a seasonally adjusted basis after rising 0.3 percent in October.
The gasoline index declined 4.2 percent in November, offsetting increases in other indexes including shelter and used cars and trucks. Other major energy component indexes were mixed with the index for fuel oil falling but the indexes for electricity and natural gas rising. Food indexes—food at home and food away from home—increased in November.
Core inflation—all items minus food and energy—rose 0.2 percent in November following a 0.2 percent rise in October. Indexes for shelter, used cars and trucks and electricity, medical care, recreation, water and sewer, and trash collection increased in November; in contrast, communications, airline fares, and motor vehicle insurance declined during the month.
Core inflation increased 2.2 percent over the last 12 months ending in October. The energy index increased 3.1 percent, while the food index increased more modestly, advancing 1.4 percent over the last 12 months. In particular, the energy index had the smallest 12-month increase in two and a half years.
The full press release can be found via the link below.
Next release is Friday, January 11, 2019, for the December 2018 Consumer Price Index.