I don't know about all of you, but I could use some hopeful news today. Here is what I got: Inflation seems to be easing this time.
Here s the deal: There are two main ways that economists measure inflation in the US, and the Fed preferred metric, the PCE, or Personal Consumption Expenditures Price Index if you fancy it, is cooling off.
The PCE reading for October showed prices went up 6% from a year ago. That is down from 6.3% in September.
The index rose just 5% over the past 12 months when you take out the prices of food and energy, which tend to skew monthly readings because they are so volatile.
The Consumer Price Index, the other metric, tends to be the more commonly talked about one, but we are not taking sides here. They are both fine and flawed, like most economic models. The PCE is essentially confirming what the CPI has shown: It is a tale of two inflations.
1 Service inflation -- think health care, restaurants, travel, etc. 2 Prices of goods are softening, particularly in areas like home furnishings and cars, two items that were in peak demand during the worst of the Pandemic.
The Fed should be pleased that its aggressive rate hikes in the past few months are having their desired effect, and can be eased up a bit. After four giant three-quarter hikes in a row, all signs point to Fed Chair Jay Powell a half-point bump later this month.
It has taken most of the year, but the economy seems to have made it over the mountain of inflation and aggressive rate hikes, according to Peter Boockvar, chief investment officer at Bleakley Financial Group.
Economists expect tomorrow s closely watched jobs report to show that hiring slowed in November, with just 200,000 positions added. That would be the second month in a row of moderate growth.
While 200,000 is nothing to sniff at, it is still not soft enough for the Fed to pause its rate hikes. Markets may cheer the fact that the Fed is hiking at a less aggressive pace than we have seen in recent months because it is low enough to allow the Fed to hike at a slower pace than we ve seen in recent months.
Janet Yellen, the first female Treasury secretary in US history, said she's made a concerted effort to avoid the chicken-scratch signatures that her predecessors imposed on the mighty dollar.
She told Stephen Colbert on CBS' The Late Show that this was something you could really screw up, and I wanted to get it right. I practiced and I practiced. Soon, sheets of dollar bills rolling off the presses at the Fort Worth Bureau of Engraving and Printing will bear her signature, as is customary for the head of the Treasury.
Colbert said Jack Lew's loopty-loop scrawl looked like a child would draw smoke coming from a chimney.
Tim Geithner's was simply illegible, and he told Marketplace in 2012 that he had to tweak it to something where people could read my name. Steven Mnuchin cleaned up his signature and made it a non-cursive version for bills bearing his name.
My colleague Alicia Wallace reports that it has been a tradition for more than a century that both the Treasury secretary and the US treasurer sign currency to make them legal tender. Yellen's bills were delayed while Biden appointed a new treasurer, Marilynn Malerba.
Bonus trivia: These will be the first US bills to bear the signatures of two women.