Back in January and even into February, the idea of recession seemed no longer so far-fetched. The FOMC and orthodox economists had been claiming since late 2014 that the only economic fate was “full employment” and the satisfying economic conditions that accompany it. Instead, the latter half of 2015 turned uncomfortably close to the “impossible” nightmare scenario. What was totally [...]
In August 2014, Chinese industrial production was estimated to have slowed sharply from +9.0% that July to just 6.9%. Consensus at the time expected only a minor variation, an insignificant change to +8.8%. Chinese industrial statistics had suggested some minor (relatively speaking) weakness at the start of the year before rebounding throughout the spring in what is now, in the [...]
Whether or not the Olympics in Brazil go off without any serious difficulties is actually an open question. There have been some athletes refusing to attend due to concerns over the Zika virus, while police and firefighters greeted travelers flying into the country through Rio’s airport with a sign that said “Welcome to Hell.” There are rumors reported in the [...]
In some contrast to spending or even “demand”, the economic problem is and has always been the lack of income growth. The difference in economy between income and spending is debt. As noted earlier, it was clear that the asset bubbles, based on debt via eurudollar expansion, created a boost in overall “demand” as represented in GDP’s Real Final Sales [...]
The final revision to Q1 GDP changed very little, at least in its natural format given that there are benchmark revisions coming in less than a month that could significantly alter all of this. Even with “residual seasonality” there is every reason to suspect that the economy is weak even as compared only to the past few years. That seems [...]
Accompanying the final estimate for Q1 GDP is the first estimate for the corporate profits and cash flow components. Profits rebounded from a dismal Q4, but that actually means much less than it sounds especially in the more important segments. Corporate profits before tax (without IVA and CCadj) were an estimated $1.86 trillion in Q1, better than the $1.77 trillion [...]
The June FOMC meeting coincides with the quarterly update of the Federal Reserve’s modeled economic and policy projections. As usual, the economy forecasts have been cut for both 2016 and 2017. The upper bound for the “central tendency” of real GDP in 2016 was 3% in the modeled calculations made at the end of 2014, those that saw no fallout [...]
Earlier I posted an article detailing the BEA's benchmark update for State & Regional level real GDP. After further research, I cannot verify the exact comparability between the two data series (vs. NIPA) leaving too many questions about the accuracy of my calculations. Rather than risk being misleading, I have removed the post altogether with a view toward updating the comparisons [...]
The BLS updated its productivity estimates yesterday to incorporate the BEA’s slight upward revision in GDP for Q1 2016. The changes to the productivity series were also small, where the initial estimate was for -1% (annualized) US labor productivity now revised to -0.6%. Private output, the BLS’s matching point in the BEA GDP series, was revised slightly higher to 0.86%. [...]
So thoroughly destroyed is Japan’s economy that some of the numbers it produces are beyond comprehension, just staggering in any meaningful context. For example, Japan’s real GDP (SAAR) for Q1 2016 was ¥530 trillion (chained 2005). That compared to ¥447 trillion in Q1 1994. Over two decades and two additional years the Japanese economy has grown by a grand total [...]
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