The Federal Reserve (Fed), and central banks globally, have been fretting over low inflation for years, but extraordinary central bank efforts to push inflation higher have not had much success achieving the desired effect, and may have come with unintended consequences.

As shown in the LPL Chart of the Day, core personal consumption expenditure (PCE) inflation, a version of the Fed’s preferred measure of inflation, has only reached the Fed’s 2% inflation target intermittently over the last 10 years.

The Fed is looking for a better way to tackle inflation as part of its comprehensive review

The recent news that technology giant Apple would miss its fourth quarter 2020 revenue targets has understandably increased investor anxiety surrounding the potential economic impact of the coronavirus (now called COVID-19). Lost in those headlines is corporate America’s impressive performance this earnings season.

“Companies have done an admirable job growing profits considering stiff headwinds,” said LPL Financial Chief Investment Strategist John Lynch. “Despite slowing global economic growth, weakness in capital investment and manufacturing, a strong US dollar, and a huge drop in energy sector profits,

We hope everyone had a nice Presidents’ Day yesterday, and by nice we hope you got the day off work!

In honor of George Washington, starting in 1971, the third Monday in February was originally celebrated as a Federal holiday to honor our country’s first president, but over time the day has changed to honor all the US presidents.

“Although Presidents’ Day is a nice day to get a deal on a washing machine or car, it is also a time to reflect on all of the great leaders our country has had over the past 200 plus years,” explained LPL Financial Senior Market Strategist Ryan Detrick.

Productivity is a key ingredient in keeping this aging economic cycle afloat, and a nice bounce in 2019’s fourth quarter productivity may be a step in the right direction. Ideally, we’d like to see the global economy stabilize and capital expenditures (capex) pick up again so the U.S. economy can reach its full potential. With the U.S.-China phase-one trade deal signed, the stage could be set for an economic rebound in 2020.

Productivity Pickup

Productivity bounced back nicely in the fourth quarter of 2019, according to data from the US Bureau of Labor Statistics (BLS). Nonfarm productivity, which measures hourly