When the BLS’s Employment Cost Index fell to a two-year low last quarter (Q1 ’14) there were no expressions of fear over “deflation” or that the economy was growing weaker, instead mostly mentioning the intended aberration of supposedly everything. There were, in fact, very few pronouncements at all at the time. Yet, what a difference a return to trend makes. [...]
In light of second quarter GDP’s imminent release and the explosion of commentary it will undoubtedly create, I thought it useful to promote a better context that includes all pertinent variables of analysis and judgment. As I said earlier today on CNBC with Rick Santelli, it is often overlooked that the US economy has been undergoing “stimulus” courses for just [...]
The durable goods report has become one of the most boring and uninteresting of all the major data series. There has been little change in the pace of growth, as these segments are clearly stuck in the rut that seemingly captured everything in the middle of 2012. While there is growth, it is nothing like what we should see in [...]
Since I believe the Gallup poll estimates to be significant, I want to revisit them with the addition of one more factor which I think further illustrates the distinct lack of progress toward escape velocity. By Gallup’s own definitions, they ask respondents (with representative sampling techniques, including a 50% landline/50% cell mix) what they spent yesterday apart from homes, autos [...]
Entrenched narratives die extremely hard, with all due respect to John McClane’s [Bruce Willis] aging franchise, and I cannot remember something so cemented as the recovery idea this year. That is really saying something considering that each and every New Year’s Day after the trough of the Great Recession has brought out the same exact sentiment, year after year like [...]
There are a few more pieces of economic accounts to put together before the disaster of a first quarter can be left behind (if only until the next set of revisions). A major part of the economic picture is derived from productivity, as that feature defines sustainability and ties together labor growth with productive investment. Capitalism is the combination of [...]
With today’s retail sales report, there is broad confirmation of the diminishing “resilience” of consumer abilities that have been dampening expectations ever since the turn in season failed to produce a massive surge. That is not to say that the past four months have not been better than those just prior, as growth has indeed cleared that low hurdle. It [...]
You hear it repeated incessantly that the US economy is consumer-driven, and perhaps it is in some very narrow aspects. The idea, however, that consumption accounts for 70% of the economy is false, a figure derived from GDP calculations that include, among other artificial creations, an imputation for homeowner rent equivalence (BEA estimates how much a homeowner might pay themselves [...]
The wholesale inventory estimates seem to have raised more than a bit of optimism. I think that is highly misplaced for both GDP and the economy. On the GDP calculation side, there needs to be another huge gain in inventory to be “highly supportive” due to the second derivative nature of the estimate. As for the economy, even on a [...]
The FOMC policy statement confirms without much doubt that there has been a major shift in conditions and outlook. To reiterate in what cannot be overstated, the purpose of implementing QE was to create economic conditions that conformed to the historical understanding of economic growth. If not so much 1995, Bernanke’s FOMC wanted to return to at least 2005 and [...]
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