The Federal Reserve’s Labor Market Conditions Index (LMCI) fell back -2.2 in September. Revisions to the last few months were also downward, suggesting once again that there is no positive economic momentum this year. Apart from a positive change in July, the LMCI declined in every other month of 2016. With increasing negatives after July, it appears that any hopes [...]
After falling by nearly 7% year-over-year in July, the third worst drop since 2009, wholesale sales expanded by nearly 7% in August, the highest gain in almost two years. As with factory orders, however, there are seasonal effects to consider given these are unadjusted comparisons. Blended together, cumulatively wholesale sales for both July and August were down about 1%. Seasonally-adjusted, [...]
The September payroll report continues a string of repetitious unevenness that is the hallmark of these types of economic periods. The economy seems to appear strong then weak and then strong again so that just when “everyone” is ready to put the weakness behind, it disappoints all over again. It is a seemingly confusing condition made more so by especially [...]
Factory orders rose 1.1% year-over-year in August, the first increase since February. Like February, however, it isn’t clear if the gain is due to actual organic growth or seasonal factors. The seasonally-adjusted series for factory orders fell 1.6%, the difference likely attributed to July. Orders rose by a considerable amount in that month on a seasonally-adjusted basis even though unadjusted [...]
When we talk about or estimate long run growth rates, we intend to encompass entire cycles. In other words, whatever the long run average of real GDP growth, for instance, it takes into account both recession and recovery to harmonize into what would be a constant trend or potential. From that view, we would expect that while growth would be [...]
Auto sales continue along with their “plateau”, being estimated at 17.8 million (SAAR) units sold in September. Ford was once again the big loser, with sales down 8.1% year-over-year; GM down 0.6%; Fiat Chrysler -0.9%; and VW -7.8%. Toyota and Nissan managed gains, +1.5% and +4.9%, respectively. Car sales were down almost 19% while pickups and light truck sales fell [...]
In economics, there is a great deal of thought and debate surrounding first and second order effects. In short, a first order effect is something that is directly caused by some change, while a second order effect is caused by the first order effect. In many instances it is the second order effects that countermand any of the first, rendering [...]
The personal savings rate rose slightly in August, though as I have shown before in truth we have no idea what the actual savings rate might be. The revisions to it over the years have made it one of the least reliable indications in the economics catalog. The reason is the suddenly frequent tendency of the BEA to seriously revise [...]
Durable goods continue to suggest a weak economy that only seems to remain in that state. Year-over-year, unadjusted estimates for new orders rose slightly for the first time since May, while seasonally adjusted total orders (including the transportation sector) were fractionally lower at $226.9 billion. That amount was 2% less than January 2016 and 4.3% below August 2014. Once again [...]
The pace of new home sales fell again in August according to the National Association of Realtors. On a seasonally-adjusted annual basis, the rate of resales registered 5.33 million compared to 5.38 million in July and 5.29 million in August 2015. The growth rate on sales has clearly slowed, and the NAR itself finds that curious in light of supposed [...]
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