A Lot Underneath Retail Sales

The retail sales report for the month of May 2018 was generally positive on the headline, which is to say it was one of the better months of recent years. Total sales growth was 6.35% year-over-year (unadjusted). A big part of it was due to an 18% year-over-year gain in retail sales at gasoline stations….


Proving The ‘L’ In Labor

Back in 2011 and 2012, apple growers in the state of Washington got the government there to declare an emergency. They were expecting a record or near-record crop of fruit but they just couldn’t find enough workers to harvest it all. Faced with a potentially devastating labor shortage, Washington’s governor turned to convicts. I wrote…


The Unemployment Rate Is Useless, But That Doesn’t Mean It Isn’t Useful

At a campaign rally in New Mexico in May 2016, Presidential Candidate Donald Trump returned to one of his favorite themes. It was a package deal. He first talked about NAFTA and what he considered the negative effects the trade agreement had had on American workers. That easily segued into what had by then become…


Three Point Nine, Still No Boundary For Sanity

For all its tortured economic history since 1989, Japan has never really had an unemployment problem. Going by its unemployment rate alone, conditions don’t ever appear to be all that out of line. At its worst, in both the dot-com recession as well as Japan’s experience during the Great “Recession”, the highest it ever got…


Someone Is On Drugs, Alright

For the second straight quarter, the Bureau of Labor Statistics (BLS) estimates US productivity growth was less than 1%. That’s not surprising given the weakening in output as measured by GDP, the data reported by the Bureau of Economic Analysis (BEA). Productivity is the bridge between the BLS’s labor numbers and the more general economic…


Give ‘Em Three Now

Credit where credit is due. In March 2018 for the third time in the last 71 months the PCE Deflator registered 2% or better. The year-over-year change just barely squeaked above that line, working out to about to 2.01%. I’m sure the FOMC will take it regardless. Baby steps. Core rates were slightly less, however….


Doubleplusgood Boom

In 1967, the US Personal Savings Rate averaged just a little more than 12%. That was pretty consistent with consumer behavior observed throughout the decades before, and the one that followed. What that meant, in terms of economic theory, was that if you as a central bank intended to accelerate the economy via the manipulation…

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It’s Seems A Pretty Big Deal Ford’s New Focus Won’t Have A Focus

Why isn’t Ford’s news getting a bigger reaction? This was no small announcement, essentially a retooling of its entire business. The company will, in effect, no longer build and sell cars; at least not cars as we think of them. The Mustang, it appears, will be the lone survivor among that category, but the Taurus…



At their December 2017 policy meeting, the FOMC majority voted to increase the monetary policy targets (RRP & IOER) by an additional 25 bps. It was the fifth such move dating back to December 2015. It was not, however, a unanimous decision. Chicago Fed President Charles Evans and Minneapolis Fed President Neel Kashkari both opposed…


The Retail Sales Shortage

Retail sales rose (seasonally adjusted) in March 2018 for the first time in four months. Related to last year’s big hurricanes and the distortions they produced, retail sales had surged in the three months following their immediate aftermath and now appear to be mean reverting toward what looks like the same weak pre-storm baseline. Exactly…