For a simple frame of reference, the seasonally adjusted annual rate (SAAR) of increase in GDP in the first quarter of 2014 was $60 billion in nominal terms. The BEA calculates that nominally business inventories grew by $112 billion in the same period. On a back of the envelope basis, inventory growth was twice that of GDP and without it [...]
When you encounter rational expectations theory you cannot help but see its totalitarian potential. The most basic premise is that policy expectations influence the behavior of agents, and thus changes in policy expectations influence changes in current behavior. If the Fed makes you think it will take an “inflationary” stance, then theory proponents expect that changes in your expectations will [...]
This post will include an excess of charts and graphs, ostensibly to put to rest any weather notions as well as highlight the macro component of what is clearly economic dysfunction. The beginning of 2013 was bad in its own right, but the excuses laid then pertained to QE’s lag (as well as winter grumbling). Since QE3 wasn’t inaugurated until [...]
There is undoubtedly a high degree of resistance to the idea that the economy is slowing, or, much worse, has already slowed considerably. For the most part, counter explanations (more narratives than evidence) revolve around the silly to absurd – snow, cold, government shutdown, etc. Office retailer Staples’ latest announcement of a sales disaster, however, actually creates a worthwhile discussion [...]
There is a growing incongruence in the mainstream narrative as it relates to the rather sunny and sanguine dispositions of current economic expectations. By now you have heard that 2014 is set to be “the year”, for once finally breaking free of all those mysterious “headwinds” that have cast asunder all the best laid plans to this point. This is [...]
The only real noteworthy aspect of this morning’s retail sales report was the dramatic downward revisions to December. I’m not sure if the temperature readings have been similarly revised, given that it is now fashionable to correlate the two, but in either case the adjustment shaved off 85 bps of Y/Y growth for sales ex autos (auto sales were revised [...]
The persistence of frozen precipitations and the attendant temperatures that accompany them have somehow become an economic variable. I suppose it will be official once the Federal Reserve announces that it has updated all its DSGE models to include a snow gauge, rendering them truly dynamic in more than one sense. The “unexpected” reappearance of “unexpected” weakness is never pinned [...]
It’s amazing to see how far standards have shrunk given this cycle. Because monetary policy has been so active in the past five years, including ZIRP and numerous QE’s, there is a mindset settling into the mainstream commentary that this is the best that can be achieved. It’s not even a “new normal”, it’s something far more sinister in that [...]
The big news this morning seems to have been Best Buy’s “shocking” numbers. The narrative now is likely to get refocused, as the wagons will be circled and Best Buy’s horrid results will be blamed on idiosyncrasies. However, Best Buy was not the only retailer to report a disastrous holiday period, it’s the only one that has gained wide attention. [...]
We already know what the holiday season looked like in certain retail segments from ShopperTrak’s first estimates of mall sales and traffic. As it turns out, the broader retail sales data from the Census Bureau is not really that much different. There was a rather large downward revision to November’s results, making the December values somewhat suspect (and candidates for [...]
Stay In Touch