In 1953, Milton Friedman wrote out what have been the guiding principles of modern, orthodox economics that were necessary should it wish to join the ranks of serious science. In his Methodology of Positive Economics, Friedman recognized economics unlike harder sciences proceeds from an enormous disadvantage, meaning that for the most part all of it is unobservable. We know that [...]
It is quite interesting that two pieces of likely interconnected news hit today about everyone’s favorite German bank. First, Reuters reported rumors that C-suite officials from Deutsche Bank alerted their HR to perhaps expect double the job cuts from what was previously announced. Last October, the bank claimed that it would need to shed about 9,000 employees. Apparently, that might [...]
I generally shy away from sentiment surveys as almost a rule because I believe they are more often than not misleading. The various indices of consumer confidence fall into that categorization, especially over the past few years. According to many, consumer confidence is back to where it was during the housing bubble even though by nearly every other statistic, particularly [...]
With today’s retail sales report “mixed”, the Atlanta Fed now predicts Q3 GDP will be less than 2%. According to its GDPNow model, the weaker retail sales report, particularly the control group that enters the GDP calculation, will add up to just 2.6% Real PCE growth. In prior periods with actual growth, Real PCE has ranged from 4% to 5% [...]
Economic Reports Scorecard The economic data of the last fortnight was typical for this cycle with some reports showing improvement and others the opposite; "mixed" has been the most often used adjective of this expansion. Of course, some reports are more important than others and the bad news was concentrated in an area that has consistently supported the economic bull [...]
Retail sales in September 2016 were mixed, though what I mean by that is importantly different than what it used to suggest. Before 2012, “mixed” results in accounts like retail sales indicated that there was some good, some concerning. After last year where retail sales were uniformly atrocious, “mixed” now means some components still that way, with some others just [...]
A great many asset classes have been moving almost perfectly sideways for months now. That is unusual by any standard, but more so given the circumstances of late 2016. This might be indicative of doubts, some of which are being reinforced by weakness that might be characterized as “unexpected” but really no longer is. Today’s data on Chinese exports is [...]
If you are not an economist bound by dogma, or a member of the media forbidden from using opinion of all but the finest (sounding) credentials, there is no mystery. I am as tired of writing about it as you are of reading it. The mainstream is by convention of the business cycle forced into linear extrapolations. Therefore, economic accounts [...]
The JOLTS series is, in my view, a second tier data set made so by its computational connections to the CES. The Job Openings portion I believe has proven over the past few years why it is less reliable, surging so far out of character that it is all alone in suggesting huge economic positivity that even the main BLS [...]
The US is awash in economic data that shows its economy isn’t close to matching the rhetoric of policymakers. FOMC minutes for the September policy meeting show largely what I have been writing for almost two years. Rate hikes aren’t about the economy as it is, they are about the economy that “should be”, the one that “full employment” denotes [...]
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