Newsletter - Kamran Afshar Associates Inc.

Explore the latest Lehigh Valley Economic Review

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BROWSE POSTS

Federal Reserves is holding its lending rate constant

5/7/2024, 2:40:49 PM

Between March 2022 and July 2023, the FED raised its lending rate 11 times from almost zero to 5.3%, its highest rate in 23 years.

Inflation & interest rates

9/24/2024, 5:06:28 PM

According to the Bureau of Labor Statistics, the seasonally adjusted consumer price index (CPI) rose by two-tenth of 1% in August, dropping the inflation rate over the last 12 months to 2.5%. This is the 2nd month in a row when inflation has been below 3% in over three years. It is important to note that this does not mean prices are decreasing; the last calendar year with negative inflation was 1954, and that was not a good year as the economy was in a recession part of that year.

2023, Year in Review

1/26/2024, 12:31:23 PM

The economy grew by 3.1% in 2023, the highest growth rate in the last 19 years, excluding the 20-21 gyration. The average unemployment rate for 2022 and 2023 was 3.6%, also the lowest annual average in the last 54 years.

Payroll employment rose by 187,000 in August

9/1/2023, 2:09:19 PM

According to the Bureau of Labor Statistics, payroll employment rose by 187,000 in August, slightly higher than the expected 170,000; however, significantly below August 2022's 393,000 new jobs. Still, 3.1 million new jobs were created in the last 12 months. However, the unemployment rate rose to 3.8%, which is a very low rate, as only 11% of times since 1950, the unemployment rate was lower than this. So, technically, the unemployment rate is still in the range considered full employment.

The Consumer sentiment long-term trend is up

10/9/2024, 11:03:26 AM

The consumer sentiment index, the CSI, which fell to its lowest level ever in June of 2022, has been slowly trending up, according to the University of Michigan, which released its September results. Surprisingly, the CSI should have risen rapidly instead of barely inching up, considering the strong GDP growth, low unemployment rates, and falling inflation rate.

The GDP up by a whopping 2.8%

7/29/2024, 11:43:50 AM

According to the Bureau of Economic Analysis (BEA), the advanced estimate of the US economy's 2nd quarter growth was 2.8%. This is well above the average for this century and notably, it also stands well above the 1.8% prediction according to the Wall Street Journal’s survey of economists earlier this month. Accordingly, the economy grew at 3.1% over the last 4 quarters.

The housing market has stalled

7/9/2024, 10:17:11 AM

The housing market went through explosive growth after a short slowdown at the beginning of the pandemic. The number of existing homes sold nationally was around 5.5 million annually; it exploded to 6.6 million by early 2021, more than a million units above its pre-pandemic level. Prices rose rapidly from $316,000 to $381,000, a 21% increase. Sales volume started to drop in 2022 due to higher prices; however, prices continued to rise.

May employment exceeded 400,000 in the Valley, a record high

7/29/2024, 11:02:29 AM

Payroll employment in the Lehigh Valley hit a record high of 401,700 in May, according to the Pennsylvania Department of Labor and Industry. The unemployment rate has fallen to 3.6% and has remained below 4%—a level considered full employment—for the past 22 months.

Gasoline prices dropped below last year

10/2/2024, 4:27:37 PM

As of this writing, GasBuddy reports that the lowest price for regular gas in the Valley has dropped to $2.95, below the national average of $3.22 per gallon. Gas prices have dropped in 15 out of the last 27 months, falling by $1.73 from its peak of $4.93 in June 2022. According to the U.S. Energy Information Administration (EIA), the previous record for gas prices was established in June 2008 at $4.06 per gallon. When adjusted for inflation, this figure corresponds to $5.81 in today’s dollars, marking it the highest inflation-adjusted monthly average gas price on record. During 2008, gasoline prices surged due to oil prices reaching an all-time high of $134 per barrel, equivalent to $190 in today's dollars. However, as the Great Recession deepened, oil prices sharply declined, falling to $41 per barrel by the end of 2008. Gasoline prices followed this downward trend, dropping to $1.70 per gallon by December of that year.

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