Tag Archive: Auto Sales

Dollar (In) Demand

The last time was bad, no getting around it. From the end of 2014 until the first months of 2016, the Chinese economy was in a perilous state. Dramatic weakness had emerged which had seemed impossible to reconcile with conventions about the country. Committed to growth over everything, and I mean everything, China was the one country the world thought it could count on for being immune to the widespread economic sickness.

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Dimmed Hopes In China Cars, Too

As noted earlier this week, the world’s two big hopes for the global economy in the second half are pinned on the US labor market continuing to exert its purported strength and Chinese authorities stimulating out of every possible (monetary) opening. Incoming data, however, continues to point to the fallacies embedded within each.

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Something Different About This One

In Japan, they call it “powerful monetary easing.” In practice, it is anything but. QQE with all its added letters is so authoritative that it is knocked sideways by the smallest of economic and financial breezes. If it truly worked the way it was supposed to, the Bank of Japan or any central bank would only need it for the shortest of timeframes.

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Getting Back Up To Speed On Loss Of Speed in US Economy

For much of 2018, the idea of “overseas turmoil” lived up to its name. At least in economic terms. Market-wise, there was a lot domestically to draw anyone’s honest attention. Warnings were everywhere by the end of the year. And that was what has been at issue. Some said Europe and China are on their own, the US is cocooned in a tax cut-fueled boom. Decoupling, only now the other way around.

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Industrial Fading

It is time to start paying attention to PMI’s again, some of them. There are those like the ISM’s Manufacturing Index which remains off in a world of its own. The version of the goods economy suggested by this one index is very different than almost every other. It skyrocketed in late summer last year way out of line (highest in more than a decade) with any other economic account.

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Sometimes Bad News Is Just Right

There is some hope among those viewing bad news as good news. In China, where alarms are currently sounding the loudest, next week begins the plenary session for the State Council and its working groups. For several days, Communist authorities will weigh all the relevant factors, as they see them, and will then come up with the broad strokes for economic policy in the coming year (2019).

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Just The One More Boom Month For IP

The calendar last month hadn’t yet run out on US Industrial Production as it had for US Retail Sales. The hurricane interruption of 2017 for industry unlike consumer spending extended into last September. Therefore, the base comparison for 2018 is against that artificial low. As such, US IP rose by 5.1% year-over-year last month. That’s the largest gain since 2010.

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Now Back To Our Regularly Scheduled Economy

The clock really was ticking on this so-called economic boom. A product in many economic accounts of Keynesian-type fantasy, the destructive effects of last year’s hurricanes in sharp contrast to this year’s (which haven’t yet registered a direct hit on a major metropolitan area or areas, as was the case with Harvey and Irma) meant both a temporary rebound birthed by rebuilding as well as an expiration date for those efforts.

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Recent Concerning Consumer Credit Trends Carry On Into April

US consumers continue to recover from their debt splurge at the end of last year. Combined with still weaker income growth, the Federal Reserve estimates that aggregate revolving credit balances grew only marginally for the fourth straight month in April 2018. To put it in perspective, the total for revolving credit (seasonally adjusted) is up a mere $2.2 billion for all four months of this year combined, compared to +$5.2 billion in December 2017...

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Globally Synchronized Asynchronous Growth

Industrial Production in the United States rose 3.5% year-over-year in April 2018, down slightly from a revised 3.7% rise in March. Since accelerating to 3.4% growth back in November 2017, US industry has failed to experience much beyond that clear hurricane-related boost. IP for prior months, particularly February and March 2018, were revised significantly lower.

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Why The Last One Still Matters (IP Revisions)

Beginning with its very first issue in May 1915, the Federal Reserve’s Bulletin was the place to find a growing body of statistics on US economic performance. Four years later, monthly data was being put together on the physical volumes of trade. From these, in 1922, the precursor to what we know today as Industrial Production was formed. The index and its components have changed considerably over its near century of operative history.

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US IP On The Other Side of Harvey and Irma

Industrial Production in the US was revised to a lower level for December 2017, and then was slightly lower still in the first estimates for January 2018. Year-over-year, IP was up 3.7%. However, more than two-thirds of the gain was registered in September, October, and November (and nearly all the rest in just the single month of April 2017).

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Is Un-Humming A Word? It Might Need To Become One

Industrial Production in the US was up 3.6% year-over-year in December 2017. That’s the best for American industry since November 2014 when annual IP growth was 3.7%. That’s ultimately the problem, though, given all that has happened this year. In other words, despite a clear boost the past few months from storm effects, as well as huge contributions from the mining (crude oil) sector, American production at its best can only manage to reflect...

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The Economy Likes Its IP Less Lumpy

Industrial Production rose 3.4% year-over-year in November 2017, the highest growth rate in exactly three years. The increase was boosted by the aftermath of Harvey and Irma, leaving more doubt than optimism for where US industry is in 2017. For one thing, of that 3.4% growth rate, more than two-thirds was attributable to just two months.

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Broader Slowing in Industrial Production

Industrial Production rose 1.6% year-over-year in September 2017. That’s up from 1.2% growth in August, both months perhaps affected to some degree by hurricanes. The lack of growth and momentum, however, clearly predated the storms. The seasonally-adjusted index for IP peaked in April 2017, and has been lower ever since. This pattern, the disappointment this year is one we see replicated nearly everywhere on both sides (supply as well as demand)...

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US Retail Sales: Retail Storms

Retail sales were added in September 2017 due to the hurricanes in Texas and Florida (and the other states less directly impacted). On a monthly, seasonally-adjusted basis, retail sales were up a sharp 1.7% from August. The vast majority of the gain, however, was in the shock jump in gasoline prices. Retail sales at gasoline stations rose nearly 6% month-over-month, so excluding those sales retail sales elsewhere gained a far more modest 0.6%.

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Auto Sales Up Last Month, But Why?

Auto sales rebounded sharply in September, with most major car manufacturers reporting better numbers. Sales at Ford were up 8.9% last month from September 2016; +11.9% at GM; Toyota +14.9%; Nissan +9.5%; Honda +6.8%. The only negatives were reported by FCA (-9.7%) and Mercedes (-1.7%).

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IP Weathers Storms But Not Cars

In late August 2006, ABC News asked more than a dozen prominent economists to evaluate the impacts of hurricane Katrina on the US economy. The cataclysmic storm made landfall on August 29, 2005, devastating the city of New Orleans and the surrounding Gulf coast. The cost in human terms was unthinkable, and many were concerned, as people always are, that in economic terms the country might end up in similar devastation.

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Retail Sales and the End of ‘Reflation’

There will be an irresistible urge to the make this about the weather, but more and more data shows it’s not any singular instance. Nor is it transitory. What does prove to be temporary time and again is the upside. The economy gets hit (by “dollar” events), bounces back a little, and then goes right back into the dumps. This, it seems, is the limited extent of cyclicality in these times.

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United States: Lack Of Industrial Momentum Is (For Now) Big Auto Problems

Industrial Production disappointed in the US last month, dragged down by auto production. Despite the return of an oil sector tailwind, IP was up just 2.2% year-over-year in July 2017 according to Federal Reserve statistics. It marks the fourth consecutive month stuck around 2% growth. The lack of further acceleration is unusual in the historical context, especially following an extended period of contraction.

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