U.S. Business Cycle: Output Gap vs. Core PCE Inflation The mature phase of the U.S. business cycle began 24 months ago. The mature phase lasted 72 months in the late 1960s and 57 months in the late 1990s. Image: NBF Economics and Strategy
U.S. ISM Manufacturing Index vs. U.S. Core CPI (Core Inflation Leading Indicator) US annual core CPI dips in October to 2.3%. This chart suggests that the U.S. ISM Manufacturing Index leads U.S. Core CPI by 24 months. You may also like “ISM Manufacturing Index vs. S&P 500 Index” and “U.S. Core Inflation Expected Over the…
S&P 500 Total Return, Adjusted for Inflation, in Three Years After Initial Election The stock market performance, adjusted for inflation, in first three years since Trump’s election is quite good. Image: Bloomberg
Break-Even Inflation Rate On 10-Year TIPS and Fed Rate Cut (Hike) If inflation expectations continue to fall or remain low, the Fed could probably cut rates further. Image: Gavekal
U.S. Core Inflation Expected Over the Next 21 Months (Leading Indicator) This chart shows the U.S. core CPI expected over the next 21 months. It has been quite accurate for more than 20 years. The chart suggests that M2 velocity year-over-year leads U.S. core CPI by 21 months (R² = 0.61 since 1996). You may also…
Demographics – U.S. Inflation (CPI) vs. U.S. Population Aged 20-54 The population of 20-54s will start to increase and could therefore lead to a return to inflation. Image: Longview Economics
Inflation – Price Changes Since 2000 in the U.S. Headlines say there’s no inflation, but most important things in life are getting more expensive. Image: Deutsche Bank Global Research
Inflation – Price Changes Over the Last 20 Years in the U.S. Most important things in life are getting more expensive, while toys are getting more affordable. Image: howmuch.net
The Performance of “Deflation Asset” vs. “Inflation Assets” Interesting chart showing the performance of “Deflation Asset” vs. “Inflation Assets” since 1960. “Deflation Asset”: Government Bonds, US Investment Grade, S&P 500, US Consumer Discretionary, Growth and US High Yield “Inflation Assets”: TIPS, EAFE, US Banks, Value and Cash Image: BofA Merrill Lynch
Hotel CPI (Inflation) Interesting chart showing that hotel CPI appears to be disconnected. Is the U.S. consumer doing well? Image: Quill Intelligence, LLC
