Macro Factors

The environment shapes the selection.

Reserve adequacy, rate indications, and valuation assumptions do not stand apart from the economy that produces the claims. CAI tracks a short list of indicators — inflation, labor, interest rates, money supply, asset prices, and energy — because each one informs an actuarial judgment we are asked to make. Charts show the trailing five years of publicly available data, refreshed daily.

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Inflation · Price Indices

Inflation measures

Headline CPI, core CPI (excluding food and energy), medical care CPI, and the Dallas Fed Trimmed-Mean PCE. Medical CPI is shown because it drives the bulk of long-tail casualty severity trend; the trimmed-mean PCE is the Fed's preferred signal-to-noise filter.

Headline, core, and medical CPI shown as 12-month rolling year-over-year percent change, derived from the trailing 5-year monthly index levels. Trimmed-mean PCE is the 1-month annualized rate published by the Dallas Fed.

Labor · Unemployment

Headline and underemployment

U-3 is the reported unemployment rate; U-6 adds discouraged workers and part-time-for-economic-reasons. The spread between the two reflects labor slack that a single headline can hide, and has historical predictive value for workers' compensation frequency.

Source: Bureau of Labor Statistics via FRED. Monthly, seasonally adjusted.

Interest Rates · Treasury Curve

Policy and the curve

Fed Funds, 2-year, and 10-year Treasury yields against the 10-year minus 2-year spread. Negative spreads have preceded recessions with enough regularity to be worth flagging, and the curve shape directly affects discount-rate assumptions in life, OPEB, and cash-flow-tested reserving work.

Shaded bands indicate weeks where the 10y–2y spread was negative. Daily series resampled to weekly last-observation, 5-year trailing window.

Money Supply · M2 Growth

Money Supply

M2 YoY growth reflects the scale of monetary accommodation or tightening — the 2020-21 expansion (M2 grew ~25% YoY at peak) was the largest since WW2 and informs inflation paths and asset-price regimes for years after. Actuarial reserve assumptions touching inflation, discount rates, and lapse behavior benefit from seeing money-supply regime shifts in the same frame.

Source: Federal Reserve H.6 (M2SL) via FRED. Monthly, seasonally adjusted. Plotted as year-over-year percent change from trailing-60-month levels.

Assets · Equities, Commodities, Crypto

Asset prices

Equity and commodity price levels bear on insurer investment portfolios, GASB discount-rate selections, and pension funded-status volatility. Bitcoin is tracked as a reference asset for captive insurer and RRG exposure questions, not as an endorsement.

Energy · Retail Fuel

Retail fuel prices — national and by region

US-average retail gasoline and diesel, with the West Coast and Gulf Coast regions shown as the high and low ends of the national range. Fuel is a leading indicator for auto physical damage severity and for commercial trucking claim trend; the regional spread is itself a signal — widening gaps typically track refinery bottlenecks, state-level regulation, or geopolitical shocks, each of which has a different half-life in reserve selections.

Note: FRED does not publish a California-only weekly retail series. The West Coast PADD 5 average is California-led — California is roughly three-quarters of regional volume and effectively sets the West Coast price.

Source: US Energy Information Administration via FRED. Weekly retail prices, 5-year trailing.

Data sources include the Federal Reserve Economic Data (FRED) service of the Federal Reserve Bank of St. Louis, Yahoo Finance, and CoinGecko. This page is provided for informational context and does not constitute investment advice or a forecast. Full series definitions available at fred.stlouisfed.org.