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Today’s report on the economy concerning personal income, spending and durable goods orders is the last one before The Fed decides to raise rates in December.
If The Fed is using their 2% inflation rate target a guidance, they should look at today’s core personal consumption expenditures YoY. It fell to 1.28%, well below The Fed’s target inflation rate.
And then there is the durable goods orders. Specifically, Capital Goods New Orders Nondefense Ex Aircraft & Parts YoY NSA fell -1.2% YoY. That is the 7th month in a row that capital goods new orders have fallen.
Yes, real GDP growth is above 2% and personal income rose 0.4% in October and unemployment is down to 5%. On the other hand, U6 underemployment is at 9.8%, 94.2 million are NOT in the labor force, and The Fed can’t generate inflation to save its life.
So what will Janet Yellen (with cigar) and Stanley Fischer do at the next meeting of the Open Market Committee?
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