Spending Worries?

Census retail sales for May came out today, and they missed the consensus forecast slightly on the downside. But there is another pattern that may be more concerning. Let’s take a closer look at what has been going on with household spending. First, new auto purchases have been an important driver of household spending for …

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Are We Headed for a Credit Market Crash?

In a series of speeches, Federal Reserve Governor Jeremy Stein emphasized the importance of financial stability concerns in monetary policy-making. But how does one measure whether threats to financial stability are lurking? Put differently, can we know that there is a credit bubble about to burst? In his speeches, Stein cites the work of two Harvard Business School …

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Auto Sales and Weather

Our post three weeks ago on the weather and auto sales argued that bad winter weather was responsible for the slowdown in consumer spending. It was likely to be a greater contributor than factors such as improving credit scores. We used variation across states in January temperature and showed that states where January was very cold had …

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