In 1999, real GDP growth in the United States was 4.69% (Q4 over Q4). In 1998, it was 4.9989%. These were annual not quarterly rates, meaning that for two years straight GDP expanded by better than 4.5%. Individual quarters within those years obviously varied, but at the end of the day the economy was clearly booming. It also helped that [...]
Sentiment surveys such as the ISM’s Manufacturing Purchasing Managers Index are not strictly about current levels of production. Even if they were, they still wouldn’t be as straightforward as is presented. Rather, the ISM index or any PMI for that matter is an amalgam of variables ostensibly displaying how economic agents feel these variables are affecting them in any given [...]
Chinese officials are getting nervous. Everyone knows that whenever your favorite sports team struggles and fans are calling for the head coach’s head, any owner or general manager who then issues the dreaded (from the coach’s perspective) vote of confidence is essentially sealing his fate. PBOC Governor Yi Gang issued a similar sort of statement today. CNY is in freefall, [...]
Today is PMI day. Markit Economics released the flash results from several of its key surveys. Included is manufacturing in Japan (lower), as well as composites (manufacturing plus services) for the United States and Europe. Within the EU, Markit offers details for France and Germany. Given the nature of sentiment surveys, we tend to ignore these most months unless they [...]
According to one research company, new Federal Reserve Chairman Jerome Powell was disgusted and angry at his press conference yesterday. The firm, Prattle, employed facial recognition software to track Powell’s expressions throughout his inaugural press conference. By their count, he was disgusted 36 times, angry 41 times, and expressed contempt another five. Powell conveyed joy on a mere four instances. [...]
Back in October, we noted the likely coming of two important distortions in global economic data. The first was here at home in the form of Mother Nature. The other was over in China where Communist officials were gathering as they always do in their five-year intervals. That meant, potentially: In the US our economic data for a few months [...]
Once the sick man of the global economy, Europe’s system had roared back in 2017. According to the narrative, everything is right right now on the Continent. Manufacturing couldn’t possibly be any better, and the ECB forced into “emergency” monetary measures for longer than almost anyone else (except, as always, Japan) is talking confidently about winding everything down. We are [...]
According to China’s official PMI’s, those looking for a boom to begin worldwide in 2018 after it failed to materialize in 2017 are still to be disappointed. If there is going to be globally synchronized growth, it will have to happen without China’s participation in it. Of course, things could change next month or the month after, but this idea [...]
There is a fundamental assumption behind any purchasing manager index, or PMI. These are often but not always normalized to the number 50. That’s done simply for comparison purposes and the ease of understanding in the general public. That level at least in the literature and in theory is supposed to easily and clearly define the difference between growth and [...]
While the Western world was off for Christmas and New Year’s, the Chinese appeared to have taken advantage of what was a pretty clear buildup of “dollars” in Hong Kong. Going back to early November, HKD had resumed its downward trend indicative of (strained) funding moving again in that direction (if it was more normal funding, HKD wouldn’t move let [...]
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