Why Unemployment Is High
One graph tells the story: Think about that for just a minute. Unemployment is over 8% and yet unit labor costs are almost back to their all time high. If the goal is to reduce unemployment the obvious way to do that is to reduce the cost of employment. For whatever reason, that isn’t .. read more
Weekly Economic & Market Review
Is the Greek debt crisis over? Based on the stock market reaction last week one is tempted to say, yes, finally the Greek problem has been solved. Stocks sold off early in the week when it looked as if the deal might not be fully subscribed but recovered as European leaders managed to twist enough .. read more
An Inflation Warning?
Most investors focused today on the employment report from ADP which showed a gain of over 200k jobs. The more interesting – and I think significant – report came 15 minutes later when the BLS released revised figures for 4th quarter productivity and unit labor costs. From Econoday: Productivity growth for the fourth quarter was .. read more
Weekly Economic and Market Review
Got whiplash yet? If not, stand by because volatility is rising and seems likely to get worse in the months ahead. The S&P 500 was up 0.1% last week but that masks the volatility of the week. Stocks were down 1.6% Tuesday and up 1.7% on Thursday after a good jobless claims report (see below). .. read more
Weekly Economic and Market Review
So maybe the economy isn’t headed over another cliff after all? Last week’s economic data wasn’t great but it was enough to rally the market 3.5% just because it wasn’t as awful as expected. I haven’t been particularly worried about the prospect for a double dip into recession land because I’m an eternal optimist – .. read more
Weekly Economic and Market Review
The economic data released last week was pretty darn lousy but managed to be overshadowed by the Fed decision to re-engage the great electronic printing press and use the cash flow from their portfolio to buy Treasuries. With interest rates at generational lows I am a bit confused about what exactly that is supposed to .. read more
Weekly Economic and Market Review
If not for the turmoil of Greek bailouts and computer glitch induced stock market bunge jumps the economic reports last week would have been big news. The stock market may or may not be telling us something about future economic activity but it can’t be denied that current activity continues to accelerate to the upside. Led .. read more
Weekly Economic Review
The economic data released this week continues the pattern we’ve seen for months. Manufacturing is leading the recovery while consumption continues to lag. This pattern is actually quite normal for recovery from recession and is consistent with economic theory. The mainstream view that the economy can’t recover without a rise in consumption is exactly backwards. This recession .. read more
