CPI - M/M change +0.5 %
CPI - Y/Y change +3.6 %
CPI - Month/Month core (less food & energy) 0.2 %
CPI - Year/Year core (less food & energy) +1.8 %
This retail inflation is always difficult to explain because while it is most certainly the overall number which affects everyone, it is core which is of interest to economists because core is what shows the trend in inflation. Under the present circumstances both of these numbers are too high. My belief is that further expansion of money supply (QE) will increase inflation while doing little to stimulate growth.
One point which is plainly obvious is that we are not having deflation.
Initial Jobless Claims were 408,000 last week. The 4-week moving average was 402,500.
This shows a continuing weak jobs market. The "we got under 400,000" euphoria of last week has dissipated.
Existing Home Sales
Existing Home Sales - Level - (Seasonally Adjusted Annual Rate) 4,670,000 M
Existing Home Sales - Month/Month -3.5 %
Existing Home Sales - Year/Year +21.0 %
The consumer remains suspicious about the health of the economy.
Leading Economic Indicators
Leading Indicators - Month/Month change for July +0.5%.
Because of volatility and the way this index is constructed I would deem this datum useless at present.
The Philadelphia Federal Reserve survey of General Business Conditions was a mind-boggling -30.7.
What I find most compelling is that despite higher than expected inflation (which, after all is said and done, should be the driver of interest rates) we saw a major bond rally yesterday which continues today.
The technical patterns of the 30-year bond future which I use the forecast rate movement are extremely bullish and indicate the possibilities of a move in yields into uncharted territory.