ECRI: Monthly Future Inflation Gauge Readings

[HenryTo]

ECRI's future inflation gauge now at a five-year high. Courtesy of MplsBear at wallstreetbear.com:
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U.S. inflation pressures rose in Aug - report
Fri Sep 2, 2005 09:39 AM ET

NEW YORK, Sept 2 (Reuters) - Higher interest rates and input prices, an increase in loan activity and stronger job growth all pushed U.S. inflation higher in August, a report said on Friday.

However, the rising inflation pressure was partly offset by supplier delivery times, the Economic Cycle Research Institute said.

ECRI's Future Inflation Gauge, which is designed to anticipate cyclical swings in the rate of inflation, rose to 121.1 in August from a upwardly revised 119.7 in July, the research group said.

The index's annualized growth rate, which smooths out monthly fluctuations, climbed to 4.1 percent from an upwardly revised 2.3 percent.

"The U.S. future inflation gauge is now at a five-year high, suggesting that cyclical inflation pressures in the U.S. are intensifying," said Lakshman Achuthan, managing director for the ECRI.

[HenryTo]

ECRI's Future Inflation Gauge for the month of February hit a reading of 115.9, a new low for this cycle. Annual ROC now at -5.4%. January's reading was revised lower to 117.7.

No inflationary feedback loop according to the ECRI.

[HenryTo]

According to the ECRI, inflationary pressured edged up slightly in their latest readings - but is still currently in a cyclical downtrend, despite the Fed's rate cuts over the last four months:
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U.S. inflation pressures edge up in January: ECRI

NEW YORK (Reuters) - U.S. inflation pressures edged up in January as inflationary moves in commodity price and interest rate measures were partly offset by a disinflationary move in a measure of loans, a report said on Friday.

The Economic Cycle Research Institute's U.S. Future Inflation Gauge (USFIG), designed to anticipate cyclical swings in the rate of inflation, rose to 117.9 from December's 117.4, revised upward from 117.1.

"Despite the slight uptick, the USFIG remains close to December's 31-month low, suggesting that U.S. inflation pressures are still subdued," said Lakshman Achuthan, managing director at ECRI.

The gauge's annualized growth rate, which smooths out monthly fluctuations, rose to minus 3.0 percent from minus 4.4 in December, revised from negative 4.6.

(Reporting by Rodrigo Campos; Editing by James Dalgleish)

[HenryTo]

FYI - hot off the press from the ECRI:
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3-August-2007

NEW YORK, Aug 3 (Reuters) - U.S. inflation pressures edged up in July due mainly to inflationary moves in measures of commodity prices, vendor performance and interest rates, a report by a research group said on Friday.

The Economic Cycle Research Institute's U.S. Future Inflation Gauge, designed to anticipate cyclical swings in the rate of inflation, rose to 119.3 in July from an upwardly revised 118.3 in June, originally reported as 117.8.

"Despite its latest uptick, the (gauge) remains in a cyclical downswing, suggesting that cyclical inflation concerns are premature," said ECRI managing director Lakshman Achuthan.

The index's rise was partly offset by disinflationary moves in measures of jobs and real estate loans, the report said.

The gauge's annualized growth rate, which smooths out monthly fluctuations, increased to minus 1.7 percent from minus 3.8 percent in June, revised from negative 4.2 percent.

[HenryTo]

FYI - straight from the ECRI:
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US May inflation pressures near 2-year low - ECRI
Fri Jun 1, 2007 11:10AM EDT

NEW YORK, June 1 (Reuters) - U.S. inflation pressures fell in May close to a two-year low due mainly to disinflationary moves in measures of interest rates and loans, marginally offset by an inflationary move in a measure of vendor performance, a report said on Friday.

The Economic Cycle Research Institute's U.S. Future Inflation Gauge (FIG), designed to anticipate cyclical swings in the rate of inflation, fell to 118.2 in May from 118.7 in April, revised upward from 116.6. The previous low was at 117.5 in June 2005.

"With the U.S. FIG in a sustained cyclical downtrend, U.S. inflation is not a serious concern at this time," said Lakshman Achuthan, managing director at ECRI.

The index's annualized growth rate, which smooths out monthly fluctuations, dropped to minus 3.8 percent in May from minus 3.4 percent in April, revised from negative 5.7.

[HenryTo]

Annual ROC for the FIG for April 2007 is -5.7%. Absolute level at 116.6, which is the absolute reading since May 2005.

The ECRI Future Inflation Gauge is now calling for a significant deceleration in the headline inflation numbers over the next three to six months.

[HenryTo]

Annual ROC for the FIG for November is -3.4%. Absolute level at 119.4 (which is meaningless unless you look at a year-over-year comparison).

Last month's ROC revised to -5.1%. Absolute level revised to 118.8.

[HenryTo]

First of all, the September annual rate of change was revised from -3.4 to -1.4. The absolute level of the FIG was revised to 121.6

But the good news is that the October number is significantly lower. The annual ROC for the ECRI FIG for October is -3.7. The absolute level hit 119.9 - which is the lowest level since June 2005.

[HenryTo]

Latest September growth rate: -3.4%

Absolute level in the ECRI Future Inflation Gauge is 120.3 - the lowest level since July 2005. I think we are now out of the woods.

[rffrydr]

We're now fully on the other side of the Katrina Effect. If you consider weakening wages good the numbers should get better and better.

Weakness is popping it's head out in all the major economies--except China. Unless the numbers in China.....

[HenryTo]

Latest August reading of the ECRI Future Inflation Gauge: -0.7%.

Negative reading for the first time since June 2005. CPI Inflation should continue to subside in the coming months.

[HenryTo]

Fed will definitely pause, per Bill Gross. And that the Fed Funds rate will be between 4% to 4.5% by the end of this year:

http://money.cnn.com/2006/08/04/news/economy/fed_gross.reut/index.htm?cnn=yes

[nodoodahs]

The Fed, cut? This year? Who'd a thunk it?

Homebuilders may be an "accumulate" before too long.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

[HenryTo]

Latesy July reading of the ECRI Future Inflation Gauge: 1.7%

A benign reading for five consecutive months now. Odds are that the Fed will not raise next Tuesday and should stand firm until the rest of this year (or even cut).

[rffrydr]

Above: "What the Fed doesn't finish in the commodity markets will be finished by the ECB and the Bank of Japan. The U.S. economy will most likely have a slowdown, but it doesn't make sense for us to risk a recession just because both the ECB and the Bank of Japan have been too loose with their policies."

Our old friend, the Commodity-dollar (world command demand) at roughly 3200 has never been higher with the dollar this low.[/quote]

[HenryTo]

Latest June reading of 0.5% for the ECRI Future Inflation Gauge.

This reading has now been very benign for four consecutive months. Again, the odds of a Fed Funds rate hike on August 8th is now not very high.

FYI from Marketwatch.com: The Federal Reserve is now more likely to not raise interest rates at its next policy setting meeting on August 8, according to the fed funds futures market, following weaker-than-expected June jobs data. The August fed funds futures contract was last up 0.02 points at 94.64, which implies an overnight rate of 5.36%, or a 44% chance that the Fed would raise its fed funds target to 5.50% from 5.25%. Late Thursday, the futures implied a 52% chance of a rate hike. The U.S. Labor Department said nonfarm payrolls expanded by 121,000 in June, lower than the 174,000 expected by economists surveyed by MarketWatch. The unemployment rate was steady at 4.6%, in line with expectations.