Diane Swonk
@dianeswonk.bsky.social
Chief Economist, KPMG, opinions my own
Real GDP growth came in at a 4.3% pace in the third quarter, topping the 3.8% rebound in growth in the second quarter. The economy contracted in the first quarter.
That marked the strongest gains since the back half of 2023, without a commensurate rise in employment.
That marked the strongest gains since the back half of 2023, without a commensurate rise in employment.
December 23, 2025 at 3:57 PM
Real GDP growth came in at a 4.3% pace in the third quarter, topping the 3.8% rebound in growth in the second quarter. The economy contracted in the first quarter.
That marked the strongest gains since the back half of 2023, without a commensurate rise in employment.
That marked the strongest gains since the back half of 2023, without a commensurate rise in employment.
Caution on CPI report
Pass the salt
Federal Reserve Chairman Jay Powell warned about taking the data on employment and inflation released this week with a grain of salt due to data collection problems following the government shutdown at his press conference following the Fed meeting on Dec 10.
Pass the salt
Federal Reserve Chairman Jay Powell warned about taking the data on employment and inflation released this week with a grain of salt due to data collection problems following the government shutdown at his press conference following the Fed meeting on Dec 10.
December 19, 2025 at 1:22 PM
Caution on CPI report
Pass the salt
Federal Reserve Chairman Jay Powell warned about taking the data on employment and inflation released this week with a grain of salt due to data collection problems following the government shutdown at his press conference following the Fed meeting on Dec 10.
Pass the salt
Federal Reserve Chairman Jay Powell warned about taking the data on employment and inflation released this week with a grain of salt due to data collection problems following the government shutdown at his press conference following the Fed meeting on Dec 10.
Whacky inflation data. The assumptions on shelter costs in October meant that we essentially zeroed out inflation in one of the largest single sectors. That effect will linger in the CPI data, even if it comes in higher in segment.
December 18, 2025 at 4:47 PM
Whacky inflation data. The assumptions on shelter costs in October meant that we essentially zeroed out inflation in one of the largest single sectors. That effect will linger in the CPI data, even if it comes in higher in segment.
Coming up on @cnbc.com to talk jobs, Fed, retail. We still have an economy that adds up on paper to look better than it feels to most Americans. Inflation data out Thursday.
December 16, 2025 at 5:45 PM
Coming up on @cnbc.com to talk jobs, Fed, retail. We still have an economy that adds up on paper to look better than it feels to most Americans. Inflation data out Thursday.
Emp data went into the red for Oct & Nov on net. Losses were dominated by earlier federal worker buyouts; 151K federal workers fell off the payrolls on October 1. This is separate from the government shutdown, which added to temp layoffs in Nov. The overall unempl rate hit 4.6%. WW
December 16, 2025 at 4:12 PM
Emp data went into the red for Oct & Nov on net. Losses were dominated by earlier federal worker buyouts; 151K federal workers fell off the payrolls on October 1. This is separate from the government shutdown, which added to temp layoffs in Nov. The overall unempl rate hit 4.6%. WW
@goolsbee.bsky.social @chicagofed.bsky.social
Notes that higher productivity growth increases the non-inflationary fed funds rate as the economy can grow more rapidly, without triggering inflation.
Notes that higher productivity growth increases the non-inflationary fed funds rate as the economy can grow more rapidly, without triggering inflation.
December 12, 2025 at 4:23 PM
@goolsbee.bsky.social @chicagofed.bsky.social
Notes that higher productivity growth increases the non-inflationary fed funds rate as the economy can grow more rapidly, without triggering inflation.
Notes that higher productivity growth increases the non-inflationary fed funds rate as the economy can grow more rapidly, without triggering inflation.
@chicagofed.bsky.social @goolsbee.bsky.social & @steveliesman.bsky.social of @cnbc.com
Austan notes persistence of service sector inflation, which is less related to tariffs. Why he voted no to front-loading rate cuts with inflation moving up without data. He wanted to wait until Q1.
Austan notes persistence of service sector inflation, which is less related to tariffs. Why he voted no to front-loading rate cuts with inflation moving up without data. He wanted to wait until Q1.
December 12, 2025 at 3:56 PM
@chicagofed.bsky.social @goolsbee.bsky.social & @steveliesman.bsky.social of @cnbc.com
Austan notes persistence of service sector inflation, which is less related to tariffs. Why he voted no to front-loading rate cuts with inflation moving up without data. He wanted to wait until Q1.
Austan notes persistence of service sector inflation, which is less related to tariffs. Why he voted no to front-loading rate cuts with inflation moving up without data. He wanted to wait until Q1.
Next week we will be getting employment data for November and partial payroll data for October.
Chair Powell warned about the risk to the November household survey with the government not reopened until the survey week for the household data. That is what calculates unemployment.
Chair Powell warned about the risk to the November household survey with the government not reopened until the survey week for the household data. That is what calculates unemployment.
December 12, 2025 at 2:47 PM
Next week we will be getting employment data for November and partial payroll data for October.
Chair Powell warned about the risk to the November household survey with the government not reopened until the survey week for the household data. That is what calculates unemployment.
Chair Powell warned about the risk to the November household survey with the government not reopened until the survey week for the household data. That is what calculates unemployment.
My take on the 2026 outlook. Emerging from the clouds with stimulus - bring the sunscreen. With the sunshine is risk of lingering burn of inflation.
George Harrison’s story behind the writing of “Here Comes the Sun” spoke to me.
kpmg.com/us/en/articl...
George Harrison’s story behind the writing of “Here Comes the Sun” spoke to me.
kpmg.com/us/en/articl...
Here comes the sun
Bring the sunscreen.
kpmg.com
December 12, 2025 at 1:32 PM
My take on the 2026 outlook. Emerging from the clouds with stimulus - bring the sunscreen. With the sunshine is risk of lingering burn of inflation.
George Harrison’s story behind the writing of “Here Comes the Sun” spoke to me.
kpmg.com/us/en/articl...
George Harrison’s story behind the writing of “Here Comes the Sun” spoke to me.
kpmg.com/us/en/articl...
Bond market doesn’t buy what Fed is selling. Prices in more rate cuts than Fed expects after press conference.
Powell more dovish than many of his colleagues. Dissents hit 3; 2 for no cut; 1 for 0.5% cut. Concern over who will replace Powell intensifying.
socialshare.us.kworld.kpmg.com
Powell more dovish than many of his colleagues. Dissents hit 3; 2 for no cut; 1 for 0.5% cut. Concern over who will replace Powell intensifying.
socialshare.us.kworld.kpmg.com
socialshare.us.kworld.kpmg.com
December 10, 2025 at 10:51 PM
Bond market doesn’t buy what Fed is selling. Prices in more rate cuts than Fed expects after press conference.
Powell more dovish than many of his colleagues. Dissents hit 3; 2 for no cut; 1 for 0.5% cut. Concern over who will replace Powell intensifying.
socialshare.us.kworld.kpmg.com
Powell more dovish than many of his colleagues. Dissents hit 3; 2 for no cut; 1 for 0.5% cut. Concern over who will replace Powell intensifying.
socialshare.us.kworld.kpmg.com
Coming up on @bloomberg.com TV to talk Fed decision on rates amidst much debate about whether or whether inflation or employment is the largest threat. Fed is starting to lose credibility on its inflation-fighting resolve. We are enduring the longest bout of elevated inflation since the early 1980s.
December 10, 2025 at 6:54 PM
Coming up on @bloomberg.com TV to talk Fed decision on rates amidst much debate about whether or whether inflation or employment is the largest threat. Fed is starting to lose credibility on its inflation-fighting resolve. We are enduring the longest bout of elevated inflation since the early 1980s.
Gut-wrenching drop in both the U Michigan and Conference Board surveys in November.
Mentions of tariff and trade still high, while assessment of labor market deteriorating further. Worries about recession rose.
Mentions of tariff and trade still high, while assessment of labor market deteriorating further. Worries about recession rose.
November 25, 2025 at 5:43 PM
Gut-wrenching drop in both the U Michigan and Conference Board surveys in November.
Mentions of tariff and trade still high, while assessment of labor market deteriorating further. Worries about recession rose.
Mentions of tariff and trade still high, while assessment of labor market deteriorating further. Worries about recession rose.
Retail sales weak, while portions of PPI hot - airfares up at fastest pace in PPI since March 2022.
Major margin compression for retailers, automakers & machinery, as tariffs make their way through supply chains.
Major margin compression for retailers, automakers & machinery, as tariffs make their way through supply chains.
November 25, 2025 at 2:21 PM
Retail sales weak, while portions of PPI hot - airfares up at fastest pace in PPI since March 2022.
Major margin compression for retailers, automakers & machinery, as tariffs make their way through supply chains.
Major margin compression for retailers, automakers & machinery, as tariffs make their way through supply chains.
I have a slightly different take. If @federalreserve Chair Powell were a lame duck chair, he would not have been able to whip those closest to him toward a considering a cut, which he seemed to prefer even as he underscored the divisions he bore witness to at the October meeting.
Whiplash in December Fed rate expectations is stunning.
As this Bbg chart shows, the probability of a 25bp cut went from >90% to <30% and is heading back up strongly—all in one month.
This kind of wild volatility is the opposite of the "predictability and stability" the Fed strives for,especially...
As this Bbg chart shows, the probability of a 25bp cut went from >90% to <30% and is heading back up strongly—all in one month.
This kind of wild volatility is the opposite of the "predictability and stability" the Fed strives for,especially...
November 25, 2025 at 1:18 PM
I have a slightly different take. If @federalreserve Chair Powell were a lame duck chair, he would not have been able to whip those closest to him toward a considering a cut, which he seemed to prefer even as he underscored the divisions he bore witness to at the October meeting.
I have been looking into metaphors for a one legged stool, given how concentrated economic gains have become. AI infrastructure and the wealth it created accounted for an inordinate amount of growth over the last two years, despite a sharp slowdown in employment.
November 22, 2025 at 4:04 PM
I have been looking into metaphors for a one legged stool, given how concentrated economic gains have become. AI infrastructure and the wealth it created accounted for an inordinate amount of growth over the last two years, despite a sharp slowdown in employment.
Should Fed weigh merits of an inter-meeting decision?
It is no secret that the Fed is deeply divided over whether to cut in December, skip a meeting or not cut at all. The government shutdown has left us with data delays and holes in the data, which further complicate that calculus.
It is no secret that the Fed is deeply divided over whether to cut in December, skip a meeting or not cut at all. The government shutdown has left us with data delays and holes in the data, which further complicate that calculus.
November 22, 2025 at 3:28 PM
Should Fed weigh merits of an inter-meeting decision?
It is no secret that the Fed is deeply divided over whether to cut in December, skip a meeting or not cut at all. The government shutdown has left us with data delays and holes in the data, which further complicate that calculus.
It is no secret that the Fed is deeply divided over whether to cut in December, skip a meeting or not cut at all. The government shutdown has left us with data delays and holes in the data, which further complicate that calculus.
NY Fed Pres Williams got the markets on a tear with his dovish comments on a December cut.
Philly Fed Pres Paulson, who had staked out her views in Oct for cuts in both Oct & Dec showed more caution. These lines stood out of her speech stood out.
Philly Fed Pres Paulson, who had staked out her views in Oct for cuts in both Oct & Dec showed more caution. These lines stood out of her speech stood out.
November 21, 2025 at 6:22 PM
NY Fed Pres Williams got the markets on a tear with his dovish comments on a December cut.
Philly Fed Pres Paulson, who had staked out her views in Oct for cuts in both Oct & Dec showed more caution. These lines stood out of her speech stood out.
Philly Fed Pres Paulson, who had staked out her views in Oct for cuts in both Oct & Dec showed more caution. These lines stood out of her speech stood out.
It is official. No CPI report for October. They will needs to impute some figures for the month when they estimate GDP as they need to deflate the GDP data and some components of PCE index are in the CPI.
November 21, 2025 at 4:34 PM
It is official. No CPI report for October. They will needs to impute some figures for the month when they estimate GDP as they need to deflate the GDP data and some components of PCE index are in the CPI.
Consumer sentiment continued its downward march in November. Inflation expectations are elevated but have cooled since Spring, while job security eroding. Younger workers most worried about jobs, while those with large stock holdings have lost the mojo they had in Sept & earlier in the month.
November 21, 2025 at 4:18 PM
Consumer sentiment continued its downward march in November. Inflation expectations are elevated but have cooled since Spring, while job security eroding. Younger workers most worried about jobs, while those with large stock holdings have lost the mojo they had in Sept & earlier in the month.
Existing home sales got slight lift in Oct; these reflect closings and offers made more than a month prior. All cash still high even as first time buyers saw some gains. Midwest & South are most affordable for first time buyers. East & West not so much.
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NAR Existing-Home Sales Report Shows 1.2% Increase in October
Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates.
share.google
November 20, 2025 at 5:53 PM
Existing home sales got slight lift in Oct; these reflect closings and offers made more than a month prior. All cash still high even as first time buyers saw some gains. Midwest & South are most affordable for first time buyers. East & West not so much.
share.google/EqwCSo7F7mMd...
share.google/EqwCSo7F7mMd...
Coming up on @bloomberg.com TV to talk jobs and Fed’s dilemma.
November 20, 2025 at 4:54 PM
Coming up on @bloomberg.com TV to talk jobs and Fed’s dilemma.
A more detailed look at the September report, the last full report we will have prior to November. The October payrolls will be released with revisions to September with the full November report (which was delayed and couldn’t be distorted) on December 16.
kpmg.com/us/en/articl...
kpmg.com/us/en/articl...
Payrolls rise, revisions drag on total
Healthcare and hospitality jobs continued to expand.
kpmg.com
November 20, 2025 at 4:16 PM
A more detailed look at the September report, the last full report we will have prior to November. The October payrolls will be released with revisions to September with the full November report (which was delayed and couldn’t be distorted) on December 16.
kpmg.com/us/en/articl...
kpmg.com/us/en/articl...
Payrolls jump more than expected 119,000 in September, but hiring over the summer was revised down even further. Gains in the service sector - healthcare and social assistance and leisure and hospitality accounted for nearly all of those gains. Construction also added jobs to build data centers.
November 20, 2025 at 3:56 PM
Payrolls jump more than expected 119,000 in September, but hiring over the summer was revised down even further. Gains in the service sector - healthcare and social assistance and leisure and hospitality accounted for nearly all of those gains. Construction also added jobs to build data centers.
Innovations often trigger manias in investment, which can become bubbles. Investors bet the potential offered by the innovation before they know who will be the actual financial winners. The result may enable adoption even as some initial investors lose their shirts.
November 19, 2025 at 6:33 PM
Innovations often trigger manias in investment, which can become bubbles. Investors bet the potential offered by the innovation before they know who will be the actual financial winners. The result may enable adoption even as some initial investors lose their shirts.
Dearth of data. The BLS will release the employment situation, which is two surveys - the establishment and the household - for November on December 16 AFTER the Federal Reserve meets on December 10. The October establishment will be backfilled.
November 19, 2025 at 6:01 PM
Dearth of data. The BLS will release the employment situation, which is two surveys - the establishment and the household - for November on December 16 AFTER the Federal Reserve meets on December 10. The October establishment will be backfilled.