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October 2013
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December 2013

November 2013

Inflation completely in check

The CPI report for October shows that inflation remains at historically low levels.  Overall, the CPI actually declined in October by 0.1%, pushed down by a 2.9% decrease in gas prices.

The graph below shows year over year changes in the CPI since 2003.  The average annual inflation over this period was 2.4% but, in the most recent year, prices increased by just under 1%.


For a longer historical perspective, consider that inflation rates since 1960 averaged 4%.

The latest CPI report also reveals the presence of larger swings in some specific consumer categories. Here are a few of these, all of which are seasonally adjusted:

  • Frozen fish and seafood prices up 2.4% in October; up 5.9% in year
  • Lettuce price up 4% in October and 10.3% in year
  • Men's pants and shorts prices up 10.3% in October alone
  • Gasoline down 2.9% in October and 10.1% in year

What the heck is going on with the price of men's pants?


Real GDP up 2.8% in Third Quarter

Real GDP grew at 2.8% in the third quarter of 2013, according to the advance estimate released today by the BEA.  This growth rate is very close to the long-run average growth rate for U.S. real GDP, which is 3%.  The graphic below plots quarterly GDP growth rates since 2003.


If this number holds up, it is the strongest growth the U.S. economy has had since the first quarter of 2012.  Keep in mind, this is the first estimate (also known as the advance estimate), and will be revised twice over the next two months. 


October Jobs Report is Mixed

The unemployment rate edged up slightly in October, but nonfarm employment rose by 204,000, according to the jobs report issued today by the BLS. The unemployment rate (pictured below) edged up from 7.2% in September.


The news isn't all bad as nonfarm employment growth was higher than it has been for all but two months in 2013.  The change in nonfarm employment is pictured below.


For those of us that are concerned about the labor force participation rate, this latest report does not bring good news, as the LFPR fell to just 62.8%.  However, some of this drop is due to some workers that were not working during the government shutdown.


  1. Unemployment rate rises to 7.3%
  2. Nonfarm employment grew by 204,000
  3. LFPR continued its decline, dropping to just 62.8%

Hopefully the jobs growth can continue for a few months and can bring the unemployment rate down below 7%.


Unemployment Rate Ticks down in September

The September jobs report shows a slight decline in the unemployment rate for September, as the rate fell to 7.2%.  Over the past year, it has fallen by 0.6%, as it was 7.8% in September of 2012.  The graph below shows the unemployment rate since the beginning of 2003.


Other important statistics from this report:

  • Nonfarm employment rose by just 148,000 jobs.  This is not enough to bring the unemployment rate down to its natural level.
  • The labor force participation rate continued its decline, falling to just 63.2%.