Articles authored by Sonu Varghese

We recently got a couple of softer than expected economic report cards – Q1 GDP growth and the April payroll report – and suddenly we’re hearing more about an impending recession. In fact, the combination of these reports with hotter than expected inflation in Q1, has raised chatter about the dreaded “stagflation” scenario, i.e. low …

The April employment report was the first one in months that went well against market expectations. Three blockbuster payroll reports in Q1 had conditioned sentiment towards expecting more of the same, but instead we got something less blockbuster(y). Payrolls grew 175,000 in April — below expectations of 240,000 and lower than the red hot Q1 …

The big picture, coming out of the Federal Open Market Committee (FOMC) meeting is that inflation has eased considerably since last year, but it remains elevated. As a result, they’re choosing to maintain policy rates where they are (in the 5.25-5.50% range). At the same time, Federal Reserve Chair Jerome Powell believes the disinflation process …

Headline GDP growth in the first quarter disappointed, but as I pointed out yesterday, underlying growth was actually quite strong. The good news is that the cyclical areas of the economy, namely housing activity and business investment, are seeing strong growth despite the hurdle of higher interest rates. That’s really icing on the cake. The …

The economy grew 1.6% in the first quarter, after adjusting for inflation. This was well below expectations for a 2.5% increase, and significantly below the 3.4% increase we saw in the last quarter of 2024. It also ended a streak of growth above 2% for six consecutive quarters. So, what happened – is growth really …

One of the central themes in our 2024 Outlook was higher productivity growth over the next several years. The key idea was that tight and mature labor markets enhance worker productivity and incentivize businesses to organize work more efficiently and invest in technological resources. That’s something that doesn’t happen when labor is cheap. With better …

Short answer: likely not. Make no mistake, inflation ran hot in the first quarter, especially relative to the fourth quarter of 2023. The March Consumer Price Index (CPI) report was an unwelcome surprise. Both headline and core inflation (excluding food and energy) came in above expectations. Headline inflation is up 3.5% from last year, and …

We’ve been getting good news about the labor market in recent months – job growth has been strong, and the unemployment rate has been below 4% for 26 straight months (the longest streak since the late 1960s). However, there were some concerns at the edges if you looked hard enough. The March payroll report set …

The Federal Reserve (Fed) left rates unchanged at their March meeting, but the headline was that the median official continues to project three interest rate cuts in 2024, each worth 0.25%-points. Going into this meeting, a big question was whether Fed members would lower that projection to just two cuts in their summary of economic …

The latest consumer price index (CPI) inflation data for February came in slightly ahead of expectations, which led the commentariat to worry about “sticky” inflation that doesn’t go away. However, I had a different sentiment after spending some time under the hood with the data. But first, the numbers. Headline CPI rose 0.4% in February, …