Overall Trade Activity Does Not Bolster Taper Optimism
Coincident to the relatively boring retail sales report, the Census Bureau estimated declining trade fortunes across the whole goods supply chain. In the seasonally adjusted data, total trade sales fell 0.1% in April after declining 1.2% in March. Compared to April 2012, total sales were up only 1.5% (meaning they declined on a real basis). .. read more
Where There’s Structural Smoke, There’s Economic Fire
Following up on this morning’s analysis of structural changes in the automobile markets globally, we see the same structural observations in the labor markets. If there does exist a strong relationship between household income and auto demand, and it is pretty clear that one does, what we find in employment trends is unsurprising. The latest .. read more
Autos and Normalization
If there has been one consistent source of strength in the US economy it has been automobile manufacturing and sales. However, even that is a bit of a misdirection since the growth in autos since 2009 owe mostly to the depth of contraction in the Great Recession. What looks like rapid growth is really a .. read more
If You Can’t Win, Change the Standards
In trying to sound modest and even magnanimous, Ben Bernanke in November 2010 penned an oped in the Washington Post justifying the recently implemented QE 2. Toward the end of his piece he acknowledged that the Federal Reserve and monetary policy could not work miracles. But given that obsequious qualification, the Fed Chairman was very .. read more
Stasis Is Not An Economic State
Economies either grow or they shrink, though shrinking is a misplaced word here. A real economic system is always moving forward, even during recession and dislocation. The word dislocation is used in modern economics where it probably does not belong, as well. The entire idea of a dislocation is antithetical to a real economy, being .. read more
Volatility Can Be The Expiration of Reflation
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” .. read more
Personal Income & Spending Align
Consumer confidence is at multi-year highs while personal income and wage levels for April were declining on a nominal basis. Without the boost of 0.2% “deflation”, disposable personal income actually declined 0.1% on a nominal basis. Personal spending fell 0.2% on a nominal basis. The internals of the nominal decline related to three separate items .. read more
An Economic Perspective Of Earnings
With today’s slight downward revision to Q1 ’13 GDP, apologies to Eric Rosengren, comes the preliminary estimate of corporate profits. Corporate earnings estimated here by the BEA are sometimes quite different from those estimated by Standard & Poors, for example. One major difference is the S&P focus on earnings per share, where the BEA is .. read more
