May must have been the month of sevens. First, exports declined by 7% year-over-year, as did imports. Now the Commerce Department reports wholesale sales within the US fell by 6.8%, which is good enough in close rounding to be yet another seven percent contraction. In the case of wholesale sales, while those estimates are likely coincidence at all around -7%, [...]
The inventory component in GDP, change in private inventories, was revised upward yet again forming the basis for the upward shift to -0.2%. At a $110.7 billion increase, the last four quarters have seen inventory gain by a combined $399 billion. That is the largest nominal expansion in history, and the most gained in terms of final sales since the [...]
With every piece of “unexpected” weak data from China, the calls for more “stimulus” grow louder and more desperate. And still the PBOC sits on the sidelines with only minor adjustments. The latest of those has been what amounts to a muni swap, with banks eligible to pledge municipal government debt as collateral in repurchase operations, SLF’s, MLF’s and even [...]
I understand the idea behind trying to get exports to fit into the orthodox conventions about the dollar and global trade, even if I don’t agree with that at all, as it at least makes some plausible sense. If the dollar is up against trade partners, in simple math terms you might expect to see fewer US exports heading overseas [...]
Personal spending fell slightly in April, making three of the last five months for declines. Such a sustained slump is actually quite rare, and you have to go back to the Great Recession to find anything like it in recent history. There are a few reasons for this now-accumulated downtrend, but it always starts with income. While personal income has [...]
Recent real estate figures for new home sales and existing home sales do not seem to agree on where the real estate market is trending. The new home sales numbers from the Census Bureau have been moving upward since the middle of last year (with potential revisions in mind) while resale levels from the National Association of Realtors show stagnation [...]
Durable goods orders declined for the third consecutive month in April, meaning with January’s flat reading that new orders for this important segment of consumer “demand” has been consistently shrinking in all of 2015 so far. New orders for capital goods have been negative year-over-year in all four months. With the pace of shipments just now starting to decelerate, it [...]
Sticking with the sentiment factor for the economy, or at least in mostly unhelpful measurements for it, it is interesting that most of the manufacturing and business sentiment indices are failing to find the FOMC’s “transitory” economic nature. The most helpful so far has been the Chicago Business Barometer, but that merely ticked above 50 after finding two months at [...]
Since hitting it most recent low in mid-March, spot WTI has rebounded about 40% reaching above $61/barrel at one point. The ultimate low, which brought the physical price down under $43, was on the morning of March 18. The FOMC statement later that afternoon has been taken as a removal of any close threat to ZIRP, taking enormous pressure off the [...]
Along with this morning’s atrocious retail sales report comes more bad news for economic statistics that have been at least clinging to the recovery narrative. My biggest complaint with the Establishment Survey is that I believe the BLS in constructing their measure of variability has been overly optimistic in its trend-cycle component. In the 1960’s and especially the 1970’s, economic [...]
Stay In Touch