With the BLS’s release of Q4 productivity figures, we get to check the BLS’s estimates just in time for tomorrow’s increasingly irrelevant payroll report. That much has become thoroughly apparent especially since the middle of last year as the Establishment Survey and unemployment rate only diverge with the overall breadth of economic indications. With GDP no longer corroborative, the labor [...]
Factory orders declined for the fourteenth consecutive month. At -4.3%, the year-over-year drop wasn’t huge but we are now into comparing consecutive yearly contractions. In other words, factory orders in December 2015 were 4.3% less than December 2014 which were 2.4% less than December 2013. It isn’t so much the magnitude as the time now in that consistency. In seasonally-adjusted [...]
Durable goods orders and shipments declined much worse in December than November, ending any hope that November’s variation was anything other than simply that. Across-the-board, capital goods as well as durable goods, the numbers year-over-year were nearly flat for November, thus suggesting just how bad 2015 was overall when slightly negative seems like a huge improvement. So where capital goods [...]
It makes for quite the juxtaposition, though perhaps not so jarring given that global banks are still enormous and disparate operations. On the one hand, Citigroup’s CEO was eminently confident from within the confines of Davos and the status quo: The market is "adjusting" to a series of headwinds that can be overcome, Citigroup CEO Michael Corbat said Thursday, a [...]
If the Wall Street Journal meant to reach for reassuring comfort, they fell far short. After spending late summer last year and into the fall proclaiming that manufacturing didn’t matter (12%), the newest round of talking points are “false positives.” In other words, manufacturing and industry does matter, after all, but just “not enough” to tip into full recession. That [...]
If top level sales are not to ever become what economists projected, as retail sales left little doubt in December, then what is left is to no longer hold the line as best as possible on resources and inputs. With inventory already massive, production must be brought down to equalize sales at each level plus already accumulated(ing) inventory. With the [...]
The scale of the inventory bloat in the latter half of 2015 was perplexing. By any reasonable standard, it doesn’t make any sense that businesses would be so bold as to almost ignore sales (and this applies at each level of the supply chain). The only way that it could have possibly occurred was businesses setting aside what was happening [...]
From the perspective of foreign economies, the primary economic problem is US consumers. That sets up a contradiction as noted earlier today with durable goods estimates; economists think US consumers are quite healthy and the contraction in manufacturing is due to foreign economies. The inventory imbalance, or bloat as it was aptly described, cannot be an overseas problem and therefore [...]
Durable goods estimates were somewhat better in November than they have been in recent months. Year-over-year, orders contracted by less than 1% in the latest month after contracting more than 2.7% in each of the prior six. In September, durable goods orders (ex transportation) were down almost 5.5%. While that counts as improvement it may not count as meaningful. The [...]
Any ideas about junk bonds outperforming because of the booming economy confirmed by a monetary policy rate hike has been killed and buried. Conventionally, it was assumed that interest rates are not the primary “risk” parameter for high yield corporates of all flavors, and that is correct. Junk issues and lower tier obligors are creatures of the credit cycle, thus [...]
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