201705.31
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When Up Or Down Might Not Matter

Many surveys of especially manufacturer sentiment were for most of the past few years highly volatile in their month-to-month changes. It wasn’t at all unusual for the Chicago Business Barometer, for example, to be up big one month and then down just as much if not more the next. What was important was not those…

201705.15
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Staying Stuck

The rebound in commodity prices is not difficult to understand, perhaps even sympathize with. With everything so depressed early last year, if it turned out to be no big deal in the end then there was a killing to be made. That’s what markets are supposed to do, entice those with liquidity to buy when…

201704.03
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A Second Confidence Experiment

The ISM Manufacturing Index declined slightly for March 2017, pulling back by 0.5 points after registering a multi-year high in February. The difference between the index and troubling auto sales, for example, is another reminder of what is truly a large disparity between economic statistics and sentiment. The ISM version of a PMI is considered…

201702.03
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The Cycle Repeats (And Repeats)

Factory orders rose 2.0% in December 2016 year-over-year (NSA), the fourth positive number in the last five months. In what is a perfect commentary on the sorrowful state of the economy, it was highest growth rate since September 2014. It seems increasingly likely that the manufacturing recession attached to the “rising dollar”, the one that…

201702.01
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A Sentiment Premium

For two years now, the ISM Chicago Business Barometer has not failed to disappoint. Whether you were bullish or bearish on the manufacturing sector, if you were frustrated by the index one month you needed only wait to the next, maybe two, to be turned around. The index value for October 2015 was 56.2, for…

201610.05
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Wrongly Resetting The ‘Recession Clock’

Factory orders rose 1.1% year-over-year in August, the first increase since February. Like February, however, it isn’t clear if the gain is due to actual organic growth or seasonal factors. The seasonally-adjusted series for factory orders fell 1.6%, the difference likely attributed to July. Orders rose by a considerable amount in that month on a…

201610.03
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Global PMI’s ‘Languish’

From the orthodox binary view, PMI’s aren’t making any sense. Convention currently dictates that the economy must be growing, and where not moving unambiguously toward recession. Translating those expectations into these sentiment surveys means that under expectations for the former PMI’s should be not just above 50 but increasingly so, while the recessionary condition should…

201609.06
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The Real Economy: What The Interest Rate Fallacy Truly Means

Just a little over a year ago, the Institute for Supply Management (ISM) released its purchasing manager index for the services sector for August 2015. Though the level was down slightly from July, coming amidst the immediate aftermath of the “shocking” financial quakes starting in China and spreading to markets all over the world, the…

201606.10
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Bi-Weekly Economic Review

Economic Reports Scorecard Concern about recession is growing again as formerly strong portions of the economy turn down. The last two weeks brought reports of new weakness in the labor market, continued slowing in construction and renewed weakness in manufacturing. Auto sales were also weak based on the reports from individual manufacturers. The state of…

201605.24
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Something In Some of The Data?

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…