Latest news with #OmairSharif
Bloomberg
4 days ago
- Business
- Bloomberg
Stocks Surge After CPI Report
Bloomberg Television brings you the latest news and analysis leading up to the final minutes and seconds before and after the closing bell on Wall Street. Today's guests are Inflation Insights's Omair Sharif, Principal Asset's Seema Shah Portal Innovations' John Flavin, Wells Fargo's Aaron Rakers, Former Canadian Minister of International Trade Mary Ng, Morgan Stanley's Andrew Slimmon, DA Davidson's Gil Luria, JPMorgan's Jay Barry, Milo's Tea Company's Tricia Wallwork, Duski. (Source: Bloomberg)
New York Times
30-07-2025
- Business
- New York Times
Live Updates: Fed Holds Rates Despite Internal Divisions and Political Pressure
Federal Reserve policymakers have stressed that their decisions on interest rates in coming months will depend on what happens in the economic data. Just one problem: That data may be becoming less reliable. The Bureau of Labor Statistics last month said it was reducing its collection of data on consumer prices, and had stopped gathering data entirely in several areas. On Tuesday, the agency provided more details on the cutbacks and indicated they were more significant than previously understood. Collecting the data that goes into the Consumer Price Index is a labor-intensive operation. Every month, a small army of government workers visits stores and other businesses across the country to check prices of eggs, underwear, haircuts and tens of thousands of other goods and services. The data collected is the basis for the inflation measures that Fed policymakers rely on when setting interest rates, and that determine cost-of-living increases in union contracts and Social Security benefits, among other uses. In its announcement on Tuesday, the Bureau of Labor Statistics said that in addition to suspending data collection in three cities, it had also reduced the amount of data it was collecting in the rest of the country by about 15 percent on average. The cuts affected data on consumer products and on rents, both crucial information for policymakers. 'The main takeaway for me is that their data collection problems were much worse than we thought,' Omair Sharif, founder of Inflation Insights, a forecasting firm, wrote in a note to clients on Wednesday. When the government can't collect data on prices, it has to fill in the gaps with a statistical technique called 'imputation.' The more data that must be imputed, the less reliable the overall numbers become. The bureau, which is part of the Labor Department, hasn't provided a detailed explanation for the cuts, but has said it 'makes reductions when current resources can no longer support the collection effort.' The agency recently announced it would stop publishing some data on wholesale prices, also because of resource constraints. Economists have become increasingly concerned about the federal statistical system in recent years. Response rates to government surveys have fallen steadily, gradually eroding the reliability of statistics based on that data. The agencies have been working to develop new techniques that rely less on surveys, but have been hampered by shrinking budgets. Those concerns predate the current administration, but have grown worse since President Trump returned to office. The Bureau of Labor Statistics and other federal statistical agencies have struggled with staff attrition as a result of the president's freeze on federal hiring, combined with the buyouts he offered early in his term. The president's budget also proposed further cuts to the bureau's funding. Asked about the cuts on Wednesday, Jerome H. Powell, the Fed chair, said policymakers were 'getting the data that we need to do our jobs.' But he stressed the importance of the federal statistical agencies. 'The government data is really the gold standard in data,' he said. 'We need it to be good and to be able to rely on it.' The bureau, in its announcement, indicated that the cutbacks have had only a minimal impact on the overall inflation numbers. A statistical analysis conducted by the agency found that suspending data collection in the three cities changed annual inflation estimates by less than one one-hundredth of a percentage point on average. The effects weren't consistently in one direction; the cuts were more or less equally likely to push estimated inflation up and down. But that analysis didn't examine the impact of the broader cutbacks in data collection, Mr. Sharif noted. He called the agency's study 'extremely limited.' 'If that was meant to make us feel better about the quality of the C.P.I., it didn't help,' he wrote.
New York Times
30-07-2025
- Business
- New York Times
Cuts to Data Collection May Erode Reliability of Economic Statistics
Federal Reserve policymakers have stressed that their decisions on interest rates in coming months will depend on what happens in the economic data. Just one problem: That data may be becoming less reliable. The Bureau of Labor Statistics last month said it was reducing its collection of data on consumer prices, and had stopped gathering data entirely in several areas. On Tuesday, the agency provided more details on the cutbacks and indicated they were more significant than previously understood. Collecting the data that goes into the Consumer Price Index is a labor-intensive operation. Every month, a small army of government workers visits stores and other businesses across the country to check prices of eggs, underwear, haircuts and tens of thousands of other goods and services. The data collected is the basis for the inflation measures that Fed policymakers rely on when setting interest rates, and that determine cost-of-living increases in union contracts and Social Security benefits, among other uses. In its announcement on Tuesday, the Bureau of Labor Statistics said that in addition to suspending data collection in three cities, it had also reduced the amount of data it was collecting in the rest of the country by about 15 percent on average. The cuts affected data on consumer products and on rents, both crucial information for policymakers. 'The main takeaway for me is that their data collection problems were much worse than we thought,' Omair Sharif, founder of Inflation Insights, a forecasting firm, wrote in a note to clients on Wednesday. When the government can't collect data on prices, it has to fill in the gaps with a statistical technique called 'imputation.' The more data that must be imputed, the less reliable the overall numbers become. The bureau, which is part of the Labor Department, hasn't provided a detailed explanation for the cuts, but has said it 'makes reductions when current resources can no longer support the collection effort.' The agency recently announced it would stop publishing some data on wholesale prices, also because of resource constraints. Economists have become increasingly concerned about the federal statistical system in recent years. Response rates to government surveys have fallen steadily, gradually eroding the reliability of statistics based on that data. The agencies have been working to develop new techniques that rely less on surveys, but have been hampered by shrinking budgets. Those concerns predate the current administration, but have grown worse since President Trump returned to office. The Bureau of Labor Statistics and other federal statistical agencies have struggled with staff attrition as a result of the president's freeze on federal hiring, combined with the buyouts he offered early in his term. The president's budget also proposed further cuts to the bureau's funding. Asked about the cuts on Wednesday, Jerome H. Powell, the Fed chair, said policymakers were 'getting the data that we need to do our jobs.' But he stressed the importance of the federal statistical agencies. 'The government data is really the gold standard in data,' he said. 'We need it to be good and to be able to rely on it.' The bureau, in its announcement, indicated that the cutbacks have had only a minimal impact on the overall inflation numbers. A statistical analysis conducted by the agency found that suspending data collection in the three cities changed annual inflation estimates by less than one one-hundredth of a percentage point on average. The effects weren't consistently in one direction; the cuts were more or less equally likely to push estimated inflation up and down. But that analysis didn't examine the impact of the broader cutbacks in data collection, Mr. Sharif noted. He called the agency's study 'extremely limited.' 'If that was meant to make us feel better about the quality of the C.P.I., it didn't help,' he wrote.
Mint
16-07-2025
- Business
- Mint
Trump effect starts to show up in economy
According to UBS, costs for core goods excluding autos increased at their fastest monthly pace in three years. A chaotic rollout of tariffs is starting to filter through to price tags on store shelves. An immigration crackdown is beginning to weigh on jobs growth, measured by federal surveys. Taken together, the impact of President Trump's whirlwind six months back in office is showing up in the economy. The effect isn't yet enough to derail the economy, which by many measures has weathered Trump's trade wars much better than many on Wall Street and in Washington feared. Economists see less risk of a recession now than three months ago, a Wall Street Journal survey found. Yet a long stretch when Trump's policies left little imprint on the hard data appears to be ending. Investors have grown accustomed to America rolling with the punches, first during the pandemic in 2020-21 and then during the Federal Reserve's interest-rate increases from 2022-23. This time, pressure is building internally in hard-to-predict ways. Tuesday's inflation numbers for June came in close to economists' expectations at 2.7% annually. But there were price bumps on what Americans pay for key imports such as furniture and clothing, a potential sign of tariff-linked price increases that many economists think will continue in the months ahead. The costs for core goods excluding autos rose at their fastest monthly pace in three years, according to UBS. Barring a recession or pullback in tariffs, analysts at the bank project that overall inflation won't slow to April's 2.3% rate between now and the end of 2027. Copper prices touched a record after President Trump announced steep tariffs on imported supplies. 'Today's report showed that tariffs are beginning to bite," Omair Sharif, founder and president of Inflation Insights, wrote in a note to clients. Even as the stock market continued trading near records Tuesday, a selloff in government debt pushed Treasury yields higher, leaving the 30-year yield above 5% for the first time since May. Cracks also have begun to show in the labor market. While data on the unauthorized workforce is unreliable, employment growth appears to have slowed in industries that rely heavily on workers who entered the country illegally. The foreign-born labor force has shrunk significantly since March. And recent immigrants appear more reluctant to take part in the Labor Department's monthly survey of households. To be sure, Americans are still spending, and employers continue to add jobs. On Tuesday, some of the biggest U.S. banks reported better-than-expected quarterly earnings. Still, the question is whether all that will hold—and, if it doesn't, how long the world's largest economy can keep powering ahead. Inflation for June was close to economists' expectations at 2.7%. Americans as of Sunday faced a 20.6% average effective tariff rate, according to the Yale Budget Lab, the highest since 1910. The full effect of the tariffs might not be felt for months because of importers' prior stockpiling, long shipping times and Trump's mercurial dealmaking. But the Yale Budget Lab projects resulting price increases could amount to the equivalent of a $2,800 hit in yearly household income. Already, the cost of important economic inputs such as steel and aluminum have vaulted higher. Copper prices hit a record after Trump announced 50% tariffs on imported supplies starting Aug. 1, promising to make construction of data centers, homes and semiconductors more expensive. Isabella Weber, an economics professor at the University of Massachusetts, Amherst, said certainty around tariff levels eventually could give more companies cover to raise prices without losing market share. 'Once this dynamic actually kicks in, it could become self-reinforcing," she added. Even if tariffs start to show through more clearly in prices, that doesn't mean overall inflation will follow suit. Tuesday's report found that services inflation has softened, in particular for shelter. Air fares and hotel rates were also weak. That might be a sign of some households pulling back on discretionary travel. Such data could lead the Fed to conclude that subdued demand will prevent tariffs from fueling knock-on inflation, and it can thus resume cutting interest rates. White House officials have pushed against the consensus that importers will ultimately pass tariffs along to consumers. In a social-media post after Tuesday's inflation report, Trump described inflation as 'very low" and once again called on the Fed to slash interest rates. Republicans' recently-passed megabill of tax and spending cuts also could support growth in some respects, including by allowing businesses to expense new investments, said Alan Cole, a senior economist at the Tax Foundation, a Washington think tank. 'There's a lot of ability for the economy to preserve its [overall performance], even when there's inefficient policy somewhere," he said. Major banks and credit-card companies recently have reported signs of spending weakness among lower-income Americans, extending a trend from recent years. But that alone might not be enough to slow down an economy in which the wealthy are riding out a record-breaking stock market and propping up overall spending. 'We continue to struggle to see signs of weakness" in our customers, JPMorgan Chief Financial Officer Jeremy Barnum said in an earnings call Tuesday. 'The consumer basically seems to be fine." Write to David Uberti at
Bloomberg
15-07-2025
- Business
- Bloomberg
US Inflation Data Comes in Cool But Signals Tariff Bite
Economists have long warned of collateral damage from Donald Trump's trade war, but after four months of cooler-than-predicted numbers, the US Bureau of Labor Statistics on Tuesday again reported that US inflation rose less than expected. However, unlike in previous months, the new data signaled that some companies are indeed starting to pass tariff-related costs on to consumers. As overall prices rose 2.7% in June from a year earlier, appliances jumped the most in nearly five years, toys increased at the fastest pace since early 2021 while household furnishings and sports equipment climbed by the most since 2022. Inflation Insights President Omair Sharif pointed out that excluding cars, core goods prices climbed 0.55% in June—the biggest monthly advance since November 2021. 'Today's report showed that tariffs are beginning to bite,' he said in a note.
