In February 1999, the Bank of Japan announced that its call money rate would be zero “until deflationary concerns subside.” Other than a temporary shift in 2001 and 2006, deflationary concerns remain. How effective was monetary policy? That point has been partially answered by the introduction of QE over and over and over again. The zero lower bound is to [...]
Looking back it almost sounds like a completely different world. In the end, however, the world hasn’t changed, perceptions have. On May 10, 2012, German newspaper Spiegel reported that Bundesbank’s (Germany’s central bank) chief of its economics department, Jens Ulbricht, testified in the German parliament that German inflation was likely to be, “somewhat above the average within in the European [...]
Industrial production fell year-over-year in May 2016 for the ninth consecutive month. At -1.4%, it is the same kind of slow, steady contraction now that we find in so many other places. This is not the typical recession response, instead more consistent with the slowdown turning into serious than just insufficient growth while still at the precipice of potential recession. [...]
Inventory is an exceedingly simple concept spaced between the most basic economic fundamentals. Because the modern economy operates upon mass production, the flow of goods is not direct. Thus, there are structural differences between demand and supply, with inventory as the pivot in between. If end demand rises it still gets filled even though production cannot respond instantaneously (no matter [...]
As with other economic accounts, retail sales dropped back in May after the temporary rebound coincident to calendar effects. Overall sales, including autos, grew just 1.9% over May 2015, well below the 3% level that historically defines recessionary conditions. That growth rate was the 39th worst in the entire data series (out of 281 months), placing it in the lower [...]
As always, there is the attempt to put a brave face on what is shaping up to be the worst year yet. China’s “big 3” economic data were all disappointing in the context of what the last “brave face” was supposed to suggest – where weakness at the start of the year was only due to “global turmoil” and would [...]
Economic Reports Scorecard Concern about recession is growing again as formerly strong portions of the economy turn down. The last two weeks brought reports of new weakness in the labor market, continued slowing in construction and renewed weakness in manufacturing. Auto sales were also weak based on the reports from individual manufacturers. The state of auto sales is frankly a [...]
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%. [...]
Chinese imports fell for the 19th consecutive month in May, but it was the pace of the latest decline that has stirred (yet again) so much optimism. Year-over-year, Chinese imports were down just 0.4%, beating expectations for a 6% drop. From that, as you can guess, the media is awash in commentary that “stimulus” is working, meaning the recovery is [...]
Benchmark revisions continue to flow through manufacturing and industrial figures. The latest were attached to the Census Bureau’s statistics on factory orders. Having already obtained the revisions for durable goods, this series was unsurprisingly left with a major downward adjustment. I believe there is another benchmark adjustment left to be made from the 2012 Economic Census for factory orders with [...]
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