Manufacturing regionally, nationally and globally continues to be in contraction. In line with that theme, ISM reported 47.4% this morning, the 14th straight month of contraction. Manufacturing is contracting at slower rates and export orders continue to show improvement. To date this has played out more like a slowly recovering covid hangover. The fear is weak demand signaling recession, but [...]
The ISM PMI came in unchanged in November at 46.7, the 13th consecutive month this series has indicated contraction in manufacturing. On a positive note, though current production dropped, new orders rose. Other data points of note: Export orders dropped (6 of 18 industries reporting growth) Backlogs dropped (no industry reported growth in backlogs) Prices are no longer going down [...]
From a monetary policy perspective, smooth is what you are aiming for. What central bankers want in this age of expectations management is for a little bit of steady inflation. Why not zero? Because, they decided, policymakers need some margin of error. Since there is no money in monetary policy, it takes time for oblique “stimulus” signals to feed into [...]
Back in January and even into February, the idea of recession seemed no longer so far-fetched. The FOMC and orthodox economists had been claiming since late 2014 that the only economic fate was “full employment” and the satisfying economic conditions that accompany it. Instead, the latter half of 2015 turned uncomfortably close to the “impossible” nightmare scenario. What was totally [...]
New home sales surged in April to 619k SAAR. That was the highest rate, by far, since January 2008 more than eight years ago. It was also the biggest monthly gain in twenty-four years, which either suggests home sales are more than rebounding or casts doubt upon the quality of the data. Economists left no uncertainty as to which way [...]
Last week it was Target’s turn to turn in a disappointing quarterly report. While being quite unique in blaming Canada, even the results in the US segment were lackluster, at best. Earnings expectations for the fiscal year were dimmed back in May, from a range of $4.85 to $5.05 down to $4.70 to $4.90. The latest estimates, concurrent with Q2’s [...]
It is nearly impossible to spot recession and economic weakness in real time through economic accounts alone. Because of the way economic estimates are gathered and, more importantly, calculated, they will always be “behind the curve” of economic trends as they shift from one state to the next. In other words, the Bureau of Economic Analysis, much like the NBER, [...]
Given the weak state of the economy and its relation to so much monetary “stimulus”, it is still amazing that the standards for positive economic performance or momentum have been so drastically reduced. The durable goods report is a perfect example. There is no doubt that some manufacturing activity has ticked up after the disastrous months of February and March. [...]
While our focus is usually trained on markets, volatility as a concept can apply to much more than asset inflation extremities. The Japanese bond and stock markets are conforming to the QE script, as US markets begin to correlate (across the JPY-USD). What’s really interesting, however, is that despite now four years into a "recovery" a lot of economic data [...]
A healthy caterpillar will always turn into a butterfly, a beautiful, stunning representation of a natural system in good balance with sustainable proportions. Likewise, a healthy Caterpillar is a sign of a stable and healthy economic system, whether defined by region or the entire globe. If we look at Caterpillar’s dealer sales figures, it gives us a hard and pure [...]
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