Heritage Foundation’s Chief Economist EJ Antoni speculates:
Imagining: Would a Biden “Drill, Baby, Drill” Regime Have Mitigated a Iran-War Induced Cost-Push Shock
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Trump: “I Love the Inflation”
Which is good insofar as we’re going to get plenty more of it (see quote here). PPI upside surprise +1.1% vs. +0.7 m/m (Bloomberg). Core slightly below consensus (+0.4% vs. +0.5%). AIER’s Everyday Price Index near my estimate of (1.18% m/m vs 1.16% nowcasted).
Invaluable New Geopolitical Risk Indexes: AI-GPR, GPR-Oil, and More
Readers of Econbrowser know that I’ve put a lot of stress on using high frequency measures of uncertainty and risk to interpret recent events. One of those indices is the Caldara-Iacoviello GeoPolitical Risk index (GPR), referenced in too many of my posts. Matteo Iacoviello and his coauthor Jonathan Tong have undertaken a new project of invaluable service to the profession, developing AI-GPR, which uses LLMs (paper here).
Headline CPI Inflation at Consensus, Real Wages Continue to Be Eroded
Everyday prices nowcasted to outstripping measured CPI and subindices:
Slowdown in Australia
Given positive Q1 GDP growth (albeit with downside surprise of 0.3% vs 0.5% q/q Bloomberg consensus, vs. 0.4% Melbourne Institute nowcast), there’s been a substantial amount of commentary regarding elevated recession risks [1] [2]. I find this surprising as the IMF’s April WEO projected 2% y/y growth for 2026 — of course conditional on a baseline that assumed eventually decreasing oil prices. On June 3, OECD projected 1.9%, while the latest Economist Intelligence Unit forecast is 1.6%. Eyeballing the RBA forecast as of June 2, it seems like their forecast is about 1.3%, still not negative growth.
First, consider GDP:
Monthly Business Cycle Indicators: Canada
Friday release of May employment (labor force survey):
Trump in Chippewa Falls: Promising Input Price Declines to Farmers
From WisPolitics:
“Sustainable” Employment Growth Is Only at +73K
At least according to EJ Antoni’s definition, in his critique of employment growth under the Biden administration:
gov’t and the gov’t-dominated healthcare sector [employment growth].. it’s all tax-payer funded, and it’s not at all sustainable.
Yield Curve Steepening: Expected Inflation vs. Real Rates (or Something Else)
Big jumps in yields; as shown at the five year maturity, the move is evident in both nominal and real yields:
Employment and Wages: Alternative Measures
Nonfarm payroll employment upside surprise from CES. CPS indicates something less positive, as does ADP, trendwise.