201702.16
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Transitory Again

The Consumer Price Index for January 2017 rose 2.5%, pulled upward by its energy component which thanks to oil prices now being comparing to the absolutely lows last year saw that part of the index rise 11.1% year-over-year. Given that oil prices bottomed out on February 11, 2016, this is the last month where oil…

201702.15
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Real Wages Really Inconsistent

Real average weekly earnings for the private sector fell 0.6% year-over-year in January. It was the first contraction since December 2013 and the sharpest since October 2012. The reason for it is very simple; nominal wages remain stubbornly stagnant but now a rising CPI subtracts even more from them. Consumers receive no significant boost to…

201701.31
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Where’s The Momentum?

The Federal Reserve in early 2012 altered longstanding monetary policy. In January that year, the FOMC had voted to make explicit what everyone already knew, that it considered 2% inflation to be the definition of “stable” consumer prices, casting off one of the last vestiges of 1980’s era regimes where central bankers felt silence was…

201701.18
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Labor Leverage

Earned income rates adjusted for inflation have been near zero growth for two months in a row. Real average weekly earnings were revised significantly lower in November 2016, turning a small 0.5% gain into just 0.2%. The latest figures for December estimate the same lack of growth to end the year. In seasonally-adjusted terms, weekly…

201701.06
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The Denominator Prevails

The BLS reported what was on the surface another lackluster payroll report. All the headline numbers conformed to the slowed economy view of 2016. The Establishment Survey gained just 156k in December, following an upward revised 204k in November. The 6-month average, a far more appropriate interpretation given inherent statistical volatility month to month, is…

201612.16
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Another Reason For Redefining Recovery

The CPI continued its meandering in November, increasing 1.69% year-over-year in a very slight acceleration to October’s 1.64% gain. As oil and energy prices this year are compared to the worst levels last year, the CPI is brought back up not to what it would look like in an actually robust growth period but rather…

201612.15
5
1

Yellen Confirms, This Is It

Wages and slack have been at the center of the economic discussion for almost three years now. The massive shedding of employees that took place during the Great “Recession” left behind a huge pool of potential labor for the economy to work through as it was expected to recover. That never happened. So instead, economists…

201612.02
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Maladies Of Unemployment And Its Rate

The headline writers for this morning’s payroll reports can’t really help themselves. In a clickbait world, any kind of record or new high or low is bound to make its way into every article title. The unemployment rate fell to 4.6% in November, the lowest since 2007, therefore it isn’t surprising to see reporting on…

201610.13
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All Kinds Of Stock Market Irregularities

A great many asset classes have been moving almost perfectly sideways for months now. That is unusual by any standard, but more so given the circumstances of late 2016. This might be indicative of doubts, some of which are being reinforced by weakness that might be characterized as “unexpected” but really no longer is. Today’s…

201609.20
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Earnings And Valuations Update; Still Nowhere Near Good

At the end of July with a majority of the 500 companies included in the S&P 500 index having reported their earnings, the tabulated EPS (as reported) was figured around $24.09. That was already down sharply from just a month earlier when compared to analysts’ expectations from just before Q2 earnings season started. In late…