The Fed expanded its QE3 program and set levels of less than 6.5% unemployment or more than 2.5% inflation for ending its exceptionally accommodative policies. Industrial production increased 1.1% in November. The U.S. trade deficit widened 4.7% in October to $42.2 billion. The topline CPI fell 0.3% while the core CPI rose 0.1%. The topline PPI dropped 0.8% while the core PPI rose 0.1%. Business inventories rose 0.4% in October. The U.S. Treasury reported a $172.1 billion deficit in November. Initial jobless cliams dropped 32,000 to 343,000 for the week ended 12/8.
• The Fed held constant its target range of 0.0%-0.25% for the federal funds rate and expanded its quantitative easing program (QE3) to include additional $45 billion/month longer-term Treasury security purchases on top of its current $40 billion/month MBS purchases initiated in September of this year. Rather than continue to state an end date until which the FOMC plans to hold rates exceptionally low, the committee announced that it will not raise rates so long as the unemployment rate remains above 6.5%, inflation expectations 1-2 years out remain under 2.5%, and longer-term inflation expectations remain “well anchored.”
• Industrial production increased by a larger-than-expected 1.1% in November. This follows a 0.7% decline in November.
• The U.S. trade deficit widened $1.9 billion (4.7%) to $42.2 billion in October.
• The consumer price index declined 0.3% in November while the core CPI rose 0.1%.
• The producer price index dropped 0.8% in November while the core PPI increased 0.1%.
• Business inventories increased 0.4% in October.
• The U.S. Treasury reported a $172.1 billion deficit in November.
• Initial jobless claims unexpectedly dropped 32,000 to a level of 343,000 for the week ended December 8th.