The words of the day are apparently “sluggish” and “challenging.” Overnight both Target and Cisco, bellwethers in retail and tech, respectively, were both the subject of intense scrutiny. Target released earnings that “beat” while revenues and really same store comps were particularly weak. Year-over-year, sales declined 7.2% total (revenues from Q2 2015 include Target’s pharmacy business which was sold to [...]
In June 2015, Japan’s Cabinet Office, the section of the government charged with tabulating and publishing gross domestic product estimates, revised Q1 2015 GDP significantly higher to 3.9% from its preliminary 2.7% figure. Not only was that the second straight quarter of positive growth, the acceleration indicated seemed to confirm that the Japanese economy had finally shaken off the effects [...]
Economists setting their expectations for China and PBOC “stimulus” should have been paying attention to retail sales; not Chinese retail sales, but American. They keep seeing a rebound that just doesn’t exist. US consumers, as the central marginal marketplace for the world economy of goods, have steadfastly refused the invitation of the unemployment rate to produce a worldwide economic resurgence. [...]
Basic economics has proven that when the supply of something dwindles, absent an offsetting drop in demand the price should rise. When translating these fundamental terms to the labor market especially of the past few years, the supply means “slack” or the available pool of workers not yet working; demand has been, we are told repeatedly, very robust; therefore the [...]
Under traditional “rules”, devaluing of a currency is supposed to bring about a measurable, even obvious increase in the export sector of the country undertaking the manipulation. The Japanese have been notorious for believing in the paradigm, and not just in the past four years under QQE and the whispers of it. Some people still believe that China is merely [...]
In early 2005, the US Senate began debating a bill seeking to impose a broad 27.5% tariff on Chinese exports to the United States. Congress was emotionally moved by the supposed problem of pegging the yuan to the dollar, then at about 8.28 CNY for every USD. In reality, the problem wasn’t so much dollars as “dollars”, meaning that because [...]
The Personal Savings Rate is a rather important economic indication. Because it is derived from the difference between income and spending, it can tell us a great deal about the state of the economy from the consumer perspective. Unfortunately, nobody can say with any degree of confidence what the savings rate is right now, or even what it has been [...]
Last Friday the Statistics Bureau of the Japanese Ministry of Internal Affairs and Communication reported some more bad news for Prime Minister Abe and really Bank of Japan chief Kuroda. Month-over-month, the consumer price index was down again, leaving it 0.48% less in June 2016 than June 2015. This was the third consecutive month of increasingly negative year-over-year CPI estimates. [...]
In advance of today’s GDP release, it was expected that the Q2 estimate would be around 2.6% (it was only 1.2%). The major reason for the anticipated rebound was “strong” consumers, a theme that has been a part of the dominant economic narrative since 2014 introduced the phantom “best jobs market in decades.” No matter what happens in the economy, [...]
As usual, everyone is focused on the wrong part of the FOMC statement. There is already a lot being made about the one sentence inserted as “hawkish” sentiment that puts the economy, supposedly, back on its fruitful, “full employment” track. In a clear sigh of relief undoubtedly in relation to the scary May payroll report, the July 2016 FOMC statement [...]
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