201807.06
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Bi-Weekly Economic Review: Welcome To The Slowdown

Welcome to the slowdown. It isn’t much – yet – and it may just be a passing phase, but there is little doubt that the US economy has slowed somewhat. The rise in short term interest rates has stalled and the long end of the curve has rallied. The result is a flatter yield curve…

201804.02
1
9

Did China Really Win, or Did Everyone Lose?

Of all the economic accounts where last year’s big tropical storms would have had the greatest impact, any substantial boost in construction spending made the most sense. What is destroyed is most often quickly rebuilt, particularly in the public arena. One of the core functions of local government is infrastructure, and no local politician can…

201803.02
2
2

Construction Spending Unrelated To Harvey and Irma (Though Some That Is)

Public construction spending has rebounded since July last year on what looks to be storm-related cleanup costs. The Census Bureau unfortunately does not break down total spending by geographic region, which, obviously, would clarify whether or not this has been the case. For now, absent also estimates for Q4 state and local tax collections, we…

201802.05
5
2

The Austerity Path

What happened to the recovery? It’s a complex question with a surprisingly simple answer. The density of the topic, particularly entangled as it was in close proximity to the calamity of the Great “Recession”, clouded the diagnosis. If you ask ten different academic economists you might get ten different answers, though I suspect seven or…

201801.15
2
1

Bi-Weekly Economic Review: A Weak Dollar Stirs A Toxic Stew

Economic Reports Employment We received several employment related reports in the first two weeks of the year. The rate of growth in employment has been slowing for some time – slowly – and these reports continue that trend. The JOLTS report showed a drop in job openings, hires and quits. The Fed has been talking…

201801.03
1
5

The Anti-Reflation Story Is The One That Mattered, And The Treasury Market Isn’t The Only One Telling It

The Treasury market isn’t the only place where the idea of “globally synchronized growth” is proving a tough sell. The collapse of the yield curve suggests, in fact, it isn’t being bought one bit. Apart from bonds, US companies aren’t warming to the economic warming, either. The labor market apart from the unemployment rate remains…

201710.03
1
1

The Construction Example

Construction spending rose slightly in August after two months of serious declines. At a seasonally-adjusted annual rate of $1.22 trillion, that’s slightly less than the estimate for November 2016 when “reflation” (sentiment) was at its apex. It’s a pattern that we see repeated throughout the economic accounts; some growth in the second half of last…

201709.01
1
3

Now Capex?

Of all the high frequency data the Personal Savings Rate is probably the least reliable. It is subject to both regular and benchmark revisions that can change the estimates drastically one way or the other. One step up from that statistic is the figures for Construction Spending. The initial monthly estimates don’t survive very long,…

201708.02
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3

Fourth Order ‘Rising Dollar’ Effects Hit 2017

Total construction spending fell considerably in June 2017, according to Census Bureau estimates released yesterday. Seasonally-adjusted, layouts for new construction declined by 1.3% from May. That’s the second time in the last three months there was such a large drop. Year-over-year (unadjusted), total spending grew by just 1.2%, the lowest rate of expansion since November…

201704.10
1
0

Bi-Weekly Economic Review

It is hard not to notice that the chart above has a lot less red in it than it has in some time. That is true of the month to month data as well as the year over year changes. There has been a widely reported gap between so called soft data – surveys and…