It seems as if some “markets” are having a difficult time coping with the different speed at which the economy is changing. Maybe that should be expected given the dramatic transformation of them into often computer-driven frenzies of headline scans. But this is something else, made so by the nature of this current economic condition as divorced from our experience. [...]
The ongoing lesson in PMI interpretation added another layer with China’s turn. The official manufacturing PMI dropped back to 50.1in April from 50.2 in March. Last month’s rise above 50 was the first in that position since last July. Because of the mainstream interpretation about what 50 or not 50 means, it was taken then as if it were definitive [...]
If there is any wonder why PMI’s deserve scorn, this morning’s twin bill delivered solid reasoning. Both the ISM Manufacturing Index and the Markit Manufacturing PMI declined, and both remained above 50. However, there was no real consensus about what any of it meant. Depending on the media outlet determining commentary about either, there was both positive and negative spin [...]
The emphasis on the labor market has become ubiquitous but it is not being used in the manner with which it should be used. It is now permanently attached to words like “despite” or “in contrast” no matter which economic data point is being described. The Wall Street Journal provides a perfect example in writing about the latest update for [...]
The worst part of this stilted or stunted economy is that it isn’t nearly good enough to produce widespread prosperity (with very real questions as to whether it produces any prosperity at all). It has become self-reinforcing, however, to the point of circular logic. We (economists) are now so conditioned by the low, unstable growth that we are supposed to [...]
With no “unusual” snow or “residual seasonality”, the US economy once again grinds to a halt in Q1 only now with no more reasons to dismiss it. In what has become an annual ritual, GDP barely moves in the quarter immediately following the Christmas holiday. This time, however, it wasn’t just consumers holding back in Q1. The U.S. economy inched [...]
The front end of the oil price complex continues to get all the attention because it seems to further the more optimistic narrative. It is the back end, however, that is most significant. The nearer maturities of the futures curve reflect more the funding environment than the fundamental view of oil and the economy. The lack of continued liquidation has [...]
The big news of the day had nothing to do with Janet Yellen, which was entirely appropriate given both her stance on the economy and anything she could possibly, realistically do about it (nothing). Apple reported results that were shocking in many ways, though not necessarily unexpectedly so. Last quarter, CEO Tim Cook had warned that the business had shifted. [...]
In addition to the worrisome durable goods report (in the respect that it just continues the same contraction part of the slowdown), consumer confidence slipped suggesting that the rebound in stocks and prices of other risky assets are not striking a direct correlation. There may be a delayed effect, with “confidence” or sentiment in April still more focused on the [...]
With the housing recovery, it is perhaps because it has been much more visible and earnest that the disparity is more easily appreciated and understood. Prices have surged in some places as much as the housing mania portion of the great bubble of the 2000’s, yet that has taken place despite levels of overall activity at only fractions of that [...]
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