Last week the Bureau of Labor Statistics reported that real average hourly earnings declined in April for the first time since last July. With hours worked stagnating from March to April (despite the assumed jump in the number of employees via the Establishment Survey) that meant average weekly earnings, adjusted for “inflation”, fell as well. So for all the celebration [...]
The stock market had a good week, up all four trading days, despite the continued mixed picture from the economy and earnings. Last week's economic reports continued the recent pattern of some seemingly strong reports mixed with some pretty obviously weak ones. Retail sales were better than expected but the year over year core growth rate is still at levels [...]
When I got in the investment business 23 years ago, a very wise man told me that my job as an advisor was to find clouds when everyone else saw nothing but sunshine and to find the rays of hope when everyone else was hunkered under an umbrella. Markets and economies move in cycles and while it is impossible to [...]
Although there is correlation and relation between the consumer environment and business spending, there are times when the two diverge. Typically, this might occur at the outset of actual recovery where businesses invest productively first, which then leads to increases in overall employment, wages and incomes; thus bringing consumer spending up after some lag. With consumer spending heading lower, consistent [...]
Commodity prices have been pressured lower in recent months, further suggesting that demand in the global economy is moving in the opposite direction of most mainstream commentary. The lack of price action, while ultimately good for consumers, is a big problem when such “deflation” is not driven by productivity. There is a world of difference between a lack of demand [...]
Quarterly results from IBM are watched because they serve as a proxy for business spending across the globe. Capex in the modern world often takes the form of technology/computer investments. In fact, productivity growth in the past three decades has been driven, at the margins, by corporate investments in digital technology. Ever since late last year, IBM has been keeping [...]
Since it is an employment report Friday it seems appropriate to continue on the theme of dysfunction in the labor market. I’ve already covered the more recent occurrences of the structural change post-2009, here I want to examine the foundation for this paradigm shift. As part of its academic arm, the Bureau of Labor Statistics publishes a monthly review of [...]
One graph tells the story: Think about that for just a minute. Unemployment is over 8% and yet unit labor costs are almost back to their all time high. If the goal is to reduce unemployment the obvious way to do that is to reduce the cost of employment. For whatever reason, that isn't happening. Why not? What this [...]
Is the Greek debt crisis over? Based on the stock market reaction last week one is tempted to say, yes, finally the Greek problem has been solved. Stocks sold off early in the week when it looked as if the deal might not be fully subscribed but recovered as European leaders managed to twist enough arms to get the deal [...]
Most investors focused today on the employment report from ADP which showed a gain of over 200k jobs. The more interesting - and I think significant - report came 15 minutes later when the BLS released revised figures for 4th quarter productivity and unit labor costs. From Econoday: Productivity growth for the fourth quarter was bumped up slightly and in [...]
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