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 [...]
The ISM Manufacturing PMI for June was up to 53.5 which was the best monthly showing this year. That has been taken as inarguable insistence that the US factory sector is doing what economists expect, even though 53.5 is significantly below both June 2014 and the 12-month average (which includes four months beginning February below 53) of 54.7. As usual, [...]
If there is some small gain to be had from current economic circumstances, it might be a lesson in what the dollar is and what it is not. Just a few months ago the idea of the “strong dollar” was almost ubiquitous, scarcely any shaky economic commentary could be found without mentioning that as the trump to the upside. It [...]
A couple more points about GDP revisions and the outlook for Q2. First, with inventory revisions factored, GDP less the inventory contribution was -1.03%; worse than last year’s polar vortex problem. It was the worst quarterly result since the Great Recession, which more than suggests economic weakness as more than just winter or seasonal adjustments. If there is any seasonal [...]
I normally do everything I can to avoid sentiment surveys, like the Chicago PMI (the Chicago Business Barometer to be specific), because they really are misleading without exact context. However, any large move like the one in July should bring at least some interest since outlier events are often the most informative. What may be important is not necessarily the [...]
Outside of household income, the main marginal economic factor has been inventory changes. Manufacturers since the obvious 2012 slowdown have been extremely reticent to hold inventory, and certainly at a rate well-below the pre-crisis period. That has made the past two years very unique in that respect, as manufacturing sales and inventory have closely tracked each other. Where it gets [...]
When the ISM index is sky high, it is proof of the magic of monetary acumen. Now that the more-important non-manufacturing index has fallen to a 4-year low, confusion reigns as to interpretations. My interest in the ISM is as it has always been, a relative measure of changes (not absolute levels). Thus, more important to me is not that [...]
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 [...]
The December ISM Non-Manufacturing PMI came in more than a bit lower than expected. Part of that has to do with the lingering expectations that the economy is turning upward, with some recent indications and Q3 GDP showing an assumed rebound forming. However, as noted over and over, it has been an inventory illusion propagated by QE-induced near-hysteria. There are [...]
Ever since the ISM Manufacturing Index jumped in July (after having fell below 50 in May), commentary has centered on the idea of this particular index being emblematic of the wider economy. It is largely common knowledge that a reading above 50 is supposed to denote “expansion” in manufacturing, but what does 56.4 tell us about the economy? In short, [...]
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