As it currently stands in the headline BLS figures, the Establishment Survey greatly rebounded to + 287k from a downward revised +11k in May. There is this month, just as last month, too much emphasis on the monthly payroll figure as it is more often than not noise. We can only hope the drastic extremes of the past two months [...]
As it turns out, Mario Draghi is no stranger to blanket promises. In October 2008 as head of the Bank of Italy, Draghi joined Italian Finance Minister Giulio Tremonti in promising “as much as necessary” for Italian banks via a 5-year government guarantee of their bonds. The government standby would be available all the way through the end of 2009, [...]
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 [...]
Factory orders declined slightly year-over-year in May 2016, the 18th contraction in the past nineteen months (the only positive was February and its 29th day). On a seasonally adjusted basis, factory orders fell 1% month-over-month to $455 billion. That was less than the $462 billion for March 2011 back when the end of QE2 was a topic for discussion, before [...]
In a regime where math acts as money, there are a few major potential chokepoints where shifts in math can become systemically important difficulties. In 2008, the most visible example was in repo haircuts, but the most devastating to the financial system certainly fixed income (MBS, in particular) correlation. The system could not survive rising correlation because nobody was prepared [...]
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 [...]
There wasn’t anything new or surprising in the advance durable goods report. Shipments (ex transportation) were flat and orders were up 1% year-over-year (NSA). Capital goods (non-defense, ex aircraft) shipments fell 3.4%, the tenth straight month of contraction, while new orders were down again (2.6%) for the sixteenth time out of the past nineteen months. The slump only continues. With [...]
Near the start of her tenure, Janet Yellen in a speech given on April 16, 2014, at the Economic Club of New York declared monetary policy concerned with three big factors. The first was inflation and whether or not it was moving back to the 2% target, even though by then it had been almost two years since that was [...]
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