Posts filed under “Inflation”

Rental Fever

 
Rental costs are increasing faster than home values for the first time since 2012.

Rental increases outpaced property values in 20 of the 35 largest U.S. markets last month, according to Zillow .

 


Source: Bloomberg

Category: Inflation, Real Estate

Inflation vs. P/E Model (1965 to Present)

  Relative to this morning’s column, consider this discussion about inflation and valuation: From Savita Subramanian: Inflation: The level of inflation also matters, and historically has had a strong relationship with PE multiples. Chart 2 below indicates that the relationship may not be linear, but many have simplified this relationship to the “Rule of 21”…Read More

Category: Inflation, Investing, Valuation

Stovall: Inflation/Rate Adjusted Stocks Don’t Look Expensive

  “When an inflation overlay is included, P/Es don’t look as expensive” -Sam Stovall   The U.S. equity strategist at S&P Capital IQ suggests that one must include low yields and low inflation rates when determining if stocks are expensive. The chart above shows average price-earnings ratios for the Standard & Poor’s 500 Index since…Read More

Category: Inflation, Valuation

Fed Dove-Hawk Scale

Source: Reuters

Category: Digital Media, Federal Reserve, Inflation

Consumers’ Attitudes and Their Inflation Expectations

Category: Inflation, Think Tank

Labor Participation Rate and (lack of) Wage Inflation

Marginal Participants Await Higher Wages

 

 

 

Very interesting analysis on the Not in Labor Force cohort from Bloomberg Briefs:

 

In an economic cycle which has consistently been sluggish — from the overall pace of growth to wage pressures to inflation — the decline in the unemployment rate in the past several years has been truly impressive. Still, falling participation and rising wage inflation may be the more pressing labor trends for policy makers to watch.

After peaking at 10 percent in late 2009, the unemployment rate began a downtrend that has accelerated as the economy approaches full employment. As of March, the jobless rate was 5.5 percent, or 1.1 percentage points lower than a year ago. Barring the past few years, this pace of improvement has not been witnessed since the economy surged out of the deep recession of 1981-82, which was also the last time unemployment rose above 10 percent. In that period, real GDP grew in the vicinity of 8 percent, almost triple the current pace of 2.7 percent (both measures are the year-on-year percentage change of the four-quarter moving average).

The current decline in unemployment is much less impressive because of the concurrent fall in labor force participation (the sum of those who are employed or actively seeking employment as a share of the population). If potential workers become frustrated with the job search and stop actively looking, unemployment can fall for the wrong reasons as the participation rate also drops. This overstates the degree of improvement in the labor market. As a result, the trajectory of the participation rate will materially affect how policy makers interpret the unemployment rate’s approach toward 5 percent.

* snip *

The rest is at Bloomberg Briefs (subscription)

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Category: Inflation, Wages & Income

Inflation Dynamics During the Financial Crises

Category: Inflation, Think Tank

Fed: “Have Long-Term Inflation Expectations Declined?”

Category: Federal Reserve, Inflation, Think Tank

Have Long-Term Inflation Expectations Declined?

Have Long-Term Inflation Expectations Declined? Fernanda Nechio FRBSF April 6, 2015     Based on surveys of professional forecasters, expectations for price inflation 5 to 10 years ahead have edged down over the past few years. This decline seems to be primarily driven by revised expectations from forecasters who overestimated inflation in the aftermath of…Read More

Category: Inflation, Think Tank

How much weight does the FOMC put on inflation vs unemployment?

From Torsten Sløk, Ph.D.: When I discuss the timing of Fed liftoff with clients it is essentially a debate about how much weight the FOMC puts on inflation and how much weight they put on the unemployment rate. If you believe they put a high weight on inflation, then they will not raise rates anytime…Read More

Category: Employment, Federal Reserve, Inflation