A couple more points about GDP revisions and the outlook for Q2. First, with inventory revisions factored, GDP less the inventory contribution was -1.03%; worse than last year’s polar vortex problem. It was the worst quarterly result since the Great Recession, which more than suggests economic weakness as more than just winter or seasonal adjustments. If there is any seasonal [...]
Revisions to Q1 GDP were actually a little better than expected, as the new estimates show a -0.7% drop instead of what might have been as bad as -1.5% (with one more “regular” revision to come). Record inventory remained a record, revised from $122 billion to merely $106 billion, but PCE growth came down to just 1.8% - a far [...]
Yesterday I looked at funding markets and currency proxies for detecting the end to the “dollar” pause that began on March 18. Broader credit markets agree with that assessment so far, as nominal yields and the UST curve shape have started, at least, to be redrawn back into the tightening format. Nominal yields and inflation breakevens turned right at May [...]
Leave it to a self-described socialist to undermine his own argument. Decrying the apparent overabundance of personal hygiene and fashion, presidential candidate Bernie Sanders took to confounding as to how many ways evil capitalism could produce odor-altering products but leave so many so hungry. You don't necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs [...]
Durable goods orders declined for the third consecutive month in April, meaning with January’s flat reading that new orders for this important segment of consumer “demand” has been consistently shrinking in all of 2015 so far. New orders for capital goods have been negative year-over-year in all four months. With the pace of shipments just now starting to decelerate, it [...]
A little over two years ago, in the middle of April 2013, there was a gold crash that came seemingly out of nowhere. Worse, for gold investors anyway, that crash was repeated just a few months later. Where gold had stood just shy of $1,800 an ounce at the start of QE3, those cascades had brought the metal price down [...]
The FOMC statement this week made a great deal about what amounts to charges of statistical impropriety toward the BEA’s GDP figures. The first quarter always seems to amount to a slow part of the season, which it really is because there is the massive Christmas buildup. It is clear that the Federal Reserve, referring to this not just in [...]
Sticking with the sentiment factor for the economy, or at least in mostly unhelpful measurements for it, it is interesting that most of the manufacturing and business sentiment indices are failing to find the FOMC’s “transitory” economic nature. The most helpful so far has been the Chicago Business Barometer, but that merely ticked above 50 after finding two months at [...]
To preserve any idea that the US is not heading into recession, the FOMC is now wholly reliant on statistical processes within the BEA’s use of the Census Bureau’s updated ARIMA-X13 modeling system. It is amazing to see this policy body that once proclaimed, unequivocally and forcefully, that it could perform the monetary equivalent of sorcery and alchemy reduced to [...]
The Japanese have been encouraged today by the notion that their economy might actually be finding a recovery – as economists see it. As with so many other things in this QE period, the very definition of recovery seems to be up for debate in sharp contrast to accepted economic standards not all that long ago. The issue, really, is [...]
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