Monthly Archives: June 2016

Chicago Fed Nat’l Activity Index: May 2016 Preview

The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to tick higher in tomorrow’s May report, based on The Capital Spectator’s average point forecast for several econometric estimates. The average projection for -0.15 reflects a modest improvement over the previous month. The forecast for May still anticipates that US economic growth is running below the historical trend rate for expansion. But the projection also points to a 3-month CFNAI reading that’s well above the level that marks a new NBER-defined recession.
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Treasury Market’s Inflation Forecast Holds Near 4-Month Low

Treasury market inflation expectations remain close to the lowest level since February, when economic worries were elevated. The yield spread for the nominal 10-year Treasury Note less its inflation-indexed counterpart was unchanged yesterday (June 22) at 1.43%, based on daily data via Treasury.gov. That’s near the lowest level since February—a sign that the bond market is cautious on the outlook for the US economy. Or is it a byproduct of temporary Brexit fears, which may or may not lift after tomorrow’s referendum in the UK that will decide if Britain remains in the European Union? Whatever the source of the downside bias in Treasury inflation expectations of late, the soft trend contrasts with the recent rebound in the US stock market, which implies that any macro worries are exaggerated for the world’s largest economy.
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US Business Cycle Risk Report | 20 June 2016

The key question these days for judging the outlook for the US economy: Is the sharp slowdown in job growth in May a sign of trouble in the months ahead or just a temporary blip for an otherwise healthy if aging economic expansion? We’ll have the first installment on an answer when the government publishes the June employment report in a few weeks. Meantime, the incoming numbers paint a mixed profile overall for the US macro trend, although there’s still no smoking gun for arguing that a new recession started last month via a broad review of the data.
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Book Bits |18 June 2016

● How Big Should Our Government Be?
By Jon Bakija, et al.
Summary via publisher (California University Press)
The size of government is arguably the most controversial discussion in United States politics, and this issue won’t fade from prominence any time soon. There must surely be a tipping point beyond which more government taxing and spending harms the economy, but where is that point? In this accessible book, best-selling authors Jeff Madrick, Jon Bakija, Lane Kenworthy, and Peter Lindert try to answer whether our government can grow any larger and examine how we can optimize growth and fair distribution.
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