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Thoughts From The Divide - Archive

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Housing Daunted - October 23, 2018

Following the optimism of the previous week's builder data, a recent flood of data indicates potential rain in the housing market, including permits, starts, and applications. Paramount among the problems was affordability, which is becoming problematic due to higher mortgage rates and price inflation. Wage inflation could help with affordability, but has not accelerated past rising costs.

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Independent Fed and Housing Optimism - October 16, 2018

As President Trump and Fed members exchange words following the recent market wobbles, we discuss 2005 research from the St. Louis Fed analyzing the Great Inflation, analyzing the human and political elements that complicated and informed the decision making. Housing continues to be in focus as builders continue to be optimistic, despite continued tightness in the labor market.

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NFIB Warning and Improving Conditions - October 9, 2018

Contrary to the Fed's rosy outlook on inflation, the lasest NFIB Small Business Optimism data indicates that the economy is running too hot and growing at an unsupportable rate. The same dynamics leading to overheating are helping workers, and certain demographics, including those with less than a high school diploma, are seeing strong earnings growth along with reduced unemployment and an increased participation rate.

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Fed Inflation Reassurance - October 3, 2018

Following the release of Core PCE inline with the Fed's target of 2%, and the appearance that risks are roughly balance, the Fed believes that inflation is under control. We examine some recent research from the Richmond and Cleveland Feds to that effect, and cover a recent Powell speech on the inflation outlook.

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Housing Constriction - September 18, 2018

Despite continuing confidence among home builders, housing affordability is becoming a challenge. The growing economy is helpind demand, but also tightening the labor market, leading to significant worker shortages, especially among skilled trades. There are also signs that affordability will not improve anytime soon, with continued low unemployment, tariffs, and widespread damage from hurricanes.

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SBOI Records and Tax Cuts - September 11, 2018

SBOI numbers came in at records as high expectations translated into "stuff that makes GDP grow". The effects of the Tax Cuts and Jobs Act are beginning to materialize. The Council of Economic Advisers says compensation is stronger than the traditional, "misleading" metrics and the Fed reports on repatriated funds.

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Confident Consumers, Tightness and Tariffs - August 28, 2018

Conference Board Consumer Confidence numbers indicate solid economic growth for the remainder of 2018 with both current conditions and expectations improving. Labor tightness plagues the trucking industry in FTR's State of Freight and appears in Dallas and Richmond Fed Manufacturing numbers. Trucking is also starting to be affected by tariffs.

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Construction and Curves - August 21, 2018

Richmond Fed’s Sonya Waddell weighs in on the momentum in the construction labor market, construction headwinds, and the opioid epidemic. Ahead of the Jackson Hole symposium, Atlanta Fed's Bostic worries about inverting the curve while Dallas Fed's Kaplan notes its correlation to recessions.

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Small Business Exuberance and Housing Wobbles - August 14, 2018

NFIB SBOI data indicates exuberance and extremely high levels of optimism, though labor tightness is having knock-on effects in the housing market. NAHB and the Lansing State Journal weigh in on the housing market, input costs, and housing affordability.

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