Newsletter - Kamran Afshar Associates Inc.

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BROWSE POSTS

How does the Federal Reserve influence the economy?

12/2/2024, 10:01:45 AM

The Federal Reserve system was established in 1913 as an independent federal agency with 12 regional banks and a board of governors to operate as the central bank of the United States. Its decisions significantly impact the banking systems, businesses, and the public.The Board is run by 7 members nominated by the Presidents and confirmed by the Senate to serve a one-time 14-year term; they can’t be fired or reappointed. This makes the board somewhat independent from current politics.

Inflation

12/15/2024, 3:57:00 PM

According to the Bureau of Labor Statistics, the seasonally adjusted consumer price index (CPI) rose by 0.3% in November, raising the inflation rate over the last 12 months to 2.7%. This is the 2nd month in a row that inflation has been rising. It bottomed at 2.4% in September and has been inching up since then.The annual inflation in the US in this century averages between 2.2 and 2.9%, and inflation has dropped in that range since July.

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.

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%

11/4/2024, 5:02:25 PM

The Bureau of Economic Analysis (BEA) reported an advanced estimate of 2.8% growth for the US economy in the third quarter, significantly higher than 2.0%, the consensus of economists surveyed by the Wall Street Journal, which stated that the US Economic Growth Extends Solid Streak. Over the last 4 quarters, the economy grew at an impressive 2.7%, well above this century's average annual growth rate.

The housing market

11/27/2024, 5:06:50 PM

The housing market experienced explosive growth after the pandemic, with annual home sales surpassing 6 million units. The last time something like this happened was in 2005-2006, just before the Great Recession. This time, just like before, sales volume followed its spike with a crash to around 4 million. And housing prices, like last time, continue to rise despite the sharp drop in sales volume. The similarities end there, as in 2008, the economy fell into a deep recession, but this time, it is growing.

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.

The Lehigh Valley business sentiment is on a down-trend

11/14/2024, 7:50:58 AM

The Lehigh Valley's Business Sentiment Index (BSI) experienced a sharp decline in 2022 as inflation surged. Although the pace of decline eased by late 2023 as inflation rates began to fall, the index remains on a downward trend. At 54, the October 2024 BSI is down 5% for the year but still above 50, indicating that more businesses maintain a positive outlook than a negative one.The BSI is based on a quarterly survey of businesses in the Valley conducted by the Greater Lehigh Valley Chamber of Commerce- Kamran Afshar since 1998.

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