Haver Analytics
Haver Analytics


Peter D'Antonio

Peter started working for Haver Analytics in 2016. He worked for nearly 30 years as an Economist on Wall Street, most recently as the Head of US Economic Forecasting at Citigroup, where he advised the trading and sales businesses in the Capital Markets. He built an extensive Excel system, which he used to forecast all major high-frequency statistics and a longer-term macroeconomic outlook. Peter also advised key clients, including hedge funds, pension funds, asset managers, Fortune 500 corporations, governments, and central banks, on US economic developments and markets. He wrote over 1,000 articles for Citigroup publications.   In recent years, Peter shifted his career focus to teaching. He teaches Economics and Business at the Molloy College School of Business in Rockville Centre, NY. He developed Molloy’s Economics Major and Minor and created many of the courses. Peter has written numerous peer-reviewed journal articles that focus on the accuracy and interpretation of economic data. He has also taught at the NYU Stern School of Business.   Peter was awarded the New York Forecasters Club Forecast Prize for most accurate economic forecast in 2007, 2018, and 2020.   Peter D’Antonio earned his BA in Economics from Princeton University and his MA and PhD from the University of Pennsylvania, where he specialized in Macroeconomics and Finance.

Publications by Peter D'Antonio

  • The US has mandated that light vehicles become much more efficient in coming years in an effort to lower greenhouse gas emissions. For example, light vehicles will be required to average nearly 50 miles per gallon across automaker production by 2026. The requirements are set to become even more stringent thereafter, with the ultimate goal of pushing automakers toward an all-EV fleet in coming decades. However, as a practical matter, there are increasing costs to driving emissions to zero. The improvements in fuel efficiency for many models are reaching diminishing returns, so the benefit to the environment of further gains is minimal. In addition, the country is not ready for an all-EV fleet. As EV production ramps up, the costs of needed raw materials will skyrocket, driving up vehicle prices.

    Policymakers could speed up progress toward lowering US gasoline usage and vehicle emissions with existing hybrid technology instead. To do this, policymakers would have to stop rewarding ever-higher miles per gallon for some models and instead focus on eliminating the worst gas-burning vehicles. This would bring down fuel usage in the meantime until the economy is readier for wide-scale EV production.

    Diminishing Returns. We have made a lot of progress for many vehicles that now get 33 to 50 miles per gallon. At 33 miles per gallon, it would take huge further gains to save little in terms of gasoline usage.

    Chart 1 shows miles per gallon on the horizontal axis and the corresponding gallons used to drive 100 miles on the vertical axis. By basing estimates of fuel efficiency on miles per gallon gauges, the gains seem much bigger than they are. As fuel efficiency rises – measured by miles per gallon – the fuel savings decline.

    • Service-sector total posts a healthy gain.
    • New orders and employment readings strengthen.
    • Prices index continues to move higher.
    • Inventories of durable goods edge down, while nondurables continue their rapid retreat.
    • Sales fall as durable goods purchases weaken.
    • Inventory-to-sales ratio edges up to match historic high.
  • The economy remains resilient and core measures of inflation are stubbornly high in the face of the most aggressive Fed tightening in decades. This resilience is partly a result of government stimulus programs during the COVID-19 pandemic. These programs generated a stockpile of excess savings that has continued to support household spending through rising inflation and higher interest rates. The Fed needs to counter that fiscal expansion in its fight against inflation.

    Despite all the layoffs and furloughs, household income jumped during the pandemic due to the massive fiscal stimulus. Chart 1 shows the actual level of disposable personal income through the pandemic compared to trend. The income supports totaled more than $2 trillion in 2020-21. As the chart shows, the rise in income supports matched disposable personal income almost dollar for dollar.

    • Expectations for economic and business improvement were bleak.
    • News on the inflation front improved but wages remained tight.
    • Worries about labor quality persisted as firms struggle to fill openings.
    • Strong revolving credit growth drove the overall gain in consumer credit.
    • Nonrevolving credit remained soft, possibly reflecting higher interest rates.
    • Nonrevolving credit growth is smallest since 2020.
    • Revolving credit usage slows sharply.
  • Was the recent rise in inflation caused by supply constraints or excess demand? The answer is vitally important for monetary policy. The Federal Reserve can’t do much about supply-chain issues, but it can influence the pace of demand. There is no question that supply chain issues are hampering firms’ ability to supply enough goods and services, which is driving up prices. But much of the supply issues in goods markets have occurred BECAUSE there is too much demand. The combination of expansionary monetary and fiscal policy during and after the lockdowns fueled demand beyond levels that firms could comfortably satisfy. So although there is ample evidence of supply constraints pushing up inflation, the actual root cause was too much demand – which is something the Fed can address.

    A look at retail sales gives a clear picture of the excessive amount of spending that has occurred in 2021 and 2022 (Figure 1). Prior to the pandemic, consumer demand for goods was running at a pace that was close to its long-term trend. We can view this trend line as the steady state growth rate – the pace that spending can grow without generating supply-chain issues and ultimately inflation. In other words, the trend line in the chart represents the maximum amount of retail sales that will not generate demand-led inflation pressures.

    • Sales post their third consecutive decline.
    • Median home price hits record level.
    • Higher prices and mortgage rates are driving down affordability.
    • Single-family starts ease while multi-family improve.
    • Starts and permits were revised down sharply.
    • Housing construction activity appears to be holding at an elevated range.
    • Total applications fell 11% in the latest week. -The uptrend in mortgage rates have driven big swings in the mortgage market. -Applications for refinancing collapsed.
  • • Inventory gains appear to be stalling. • April business sales built on March gains. • Inventory-to-sales ratio continued to decline. Total business inventories edged down 0.2% (+1.3% y/y) during April reversing the 0.2% March rise. [...]