Tag Archive: recession

European Data: Much More In Store For Number Four

2020-02-18

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2020-02-18

European Economy, 2016-2019
It’s just Germany. It’s just industry. The excuses pile up as long as the downturn. Over across the Atlantic the situation has only now become truly serious. The European part of this globally synchronized downturn is already two years long and just recently is it becoming too much for the catcalls to ignore. Central bankers are trying their best to, obviously, but the numbers just aren’t stacking up their way.

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US Sales and Production Remain Virus-Free, But Still Aren’t Headwind-Free

2020-02-18

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2020-02-18

Retail Sales, NSA 2005-2020
The lull in US consumer spending on goods has reached a fifth month. The annual comparisons aren’t good, yet they somewhat mask the more recent problems appearing in the figures. According to the Census Bureau, total retail sales in January rose 4.58% year-over-year (unadjusted). Not a good number, but better, seemingly, than early on in 2019 when the series was putting out 3s and 2s.

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History Shows You Should Infer Nothing From Powell’s Pause

2020-02-02

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2020-02-02

The Fed Midpoint, 2007-2008
Jay Powell says that three’s not a crowd, at least not for his rate cuts, but four would be. As usual, central bankers like him always hedge and say that “should conditions warrant” the FOMC will be more than happy to indulge (the NYSE). But what he means in his heart of hearts is that there probably won’t be any need.

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With No Second Half Rebound, Confirming The Squeeze

2020-01-29

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2020-01-29

Germany ZEW Financial Market Survey, 2006-2019
It’s a palpable impatience. Having learned absolutely nothing from the most recent German example, there’s this pervasive belief that if the economy hasn’t fallen apart by now it must be going the other way. The right way. Those are the only two options for mainstream analysis (which means it isn’t analysis).

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Very Rough Shape, And That’s With The Payroll Data We Have Now

2020-01-15

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2020-01-15

Household Survey: Civilian Employment, 2017-2019
The Bureau of Labor Statistics (BLS) has begun the process of updating its annual benchmarks. Actually, the process began last year and what’s happening now is that the government is releasing its findings to the public. Up first is the Household Survey, the less-watched, more volatile measure which comes at employment from the other direction. As the name implies, the BLS asks households who in them is working whereas the more closely scrutinized...

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Not Abating, Not By A Longshot

2020-01-14

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2020-01-14

Mexican Economy, 2006-2019
Since I advertised the release last week, here’s Mexico’s update to Industrial Production in November 2019. The level of production was estimated to have fallen by 1.8% from November 2018. It was up marginally on a seasonally-adjusted basis from its low in October.

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You Will Never Bring It Back Up If You Have No Idea Why It Falls Down And Stays Down

2019-12-10

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2019-12-10

Friedman's Plucking Model of Trend-cycle Analysis
It wasn’t actually Keynes who coined the term “pump priming”, though he became famous largely for advocating for it. Instead, it was Herbert Hoover, of all people, who began using it to describe (or try to) his Reconstruction Finance Corporation. Hardly the do-nothing Roosevelt accused Hoover of being, as President, FDR’s predecessor was the most aggressive in American history to that point, economically speaking.

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European Economy: A Time Recession

2019-12-08

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2019-12-08

European Economy, 2016-2019
Eurostat confirmed earlier today that Europe has so far avoided recession. At least, it hasn’t experienced what Economists call a cyclical peak. During the third quarter of 2019, Real GDP expanded by a thoroughly unimpressive +0.235% (Q/Q). This was a slight acceleration from a revised +0.185% the quarter before.

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The Risen (euro)Dollar

2019-12-05

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2019-12-05

India Real GDP, 1997-2019
Back in April, while she was quietly jockeying to make sure her name was placed at the top of the list to succeed Mario Draghi at the ECB, Christine Lagarde detoured into the topic of central bank independence. At a joint press conference held with the Governor of the Reserve Bank of South Africa, Lesetja Kganyago, as the Managing Director of the IMF Lagarde was asked specifically about President Trump’s habit of tweeting disdain in the direction...

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More (Badly Needed) Curve Comparisons

2019-11-23

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2019-11-23

US Treasury Yield Curve, 2000-2001
Even though it was a stunning turn of events, the move was widely celebrated. The Federal Reserve’s Open Market Committee, the FOMC, hadn’t been scheduled to meet until the end of that month. And yet, Alan Greenspan didn’t want to wait. The “maestro”, still at the height of his reputation, was being pressured to live up to it.

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For Labor And Recession, The Bad One

2019-11-12

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2019-11-12

Nonfarm Business Sector: Unit Labor Costs 1983-2019
There’s a couple of different ways that Unit Labor Costs can rise. Or even surge. The first is the good way, the one we all want to see because it is consistent with the idea of an economy that is actually booming. If workers have become truly scarce as macro forces sustain actual growth such that all labor market slack is absorbed, then businesses have to compete for them bidding up the price of marginal labor.

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Red Flags Over Labor

2019-11-10

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2019-11-10

Establishment Survey; Payrolls 2010-2019
Better-than-expected is the new strong. Even I’m amazed at the satisfaction being taken with October’s payroll numbers. While you never focus too much on one monthly estimate, this time it might be time to do so. But not for those other reasons. Sure, GM caused some disruption and the Census is winding down, both putting everyone on edge. The whisper numbers were low double digits, maybe even a negative headline estimate.

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You Have To Try Really Hard Not To See It

2019-11-07

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2019-11-07

ISM Purchasing Managers Indexes, 2017-2019
In early September, the Institute for Supply Management (ISM) released figures for its non-manufacturing PMI that calmed nervous markets. A few weeks before anyone would start talking about repo, repo operations, and not-QE asset purchases, recession and slowdown fears were already prevalent.

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QE by any other name

2019-11-07

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2019-11-07

Boosting Reserves, 2018-2019
“The essence of the interventionist policy is to take from one group to give to another. It is confiscation and distribution. “ – Ludwig von Mises, Human Action In less than a year, we have witnessed an unprecedented monetary policy rollercoaster by the Federal Reserve, which began with a momentous U-turn in the central bank’s guidance in January, and has continued to escalate ever since.

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More Down In The Downturn

2019-10-25

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2019-10-25

IHS Markit US Manufacturing, 2012-2019
Flash PMI’s from IHS Markit for the US economy were split in October. According to the various sentiment indicators, there’s a little bit of a rebound on the manufacturing side as contrary to the ISM’s estimates for the same sector. Markit reports a sharp uptick in current manufacturing business volumes during this month.

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Never Attribute To Malice What Is Easily Explained By Those Attributing Anything To Term Premiums

2019-10-13

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2019-10-13

US Treasury CMT Yields, 2017-2019
There will be more opportunities ahead to talk about the not-QE, non-LSAP which as of today still doesn’t have a catchy title. In other words, don’t call it a QE because a QE is an LSAP not an SSAP. The former is a large scale asset purchase plan intended on stimulating the financial system therefore economy. That’s what it intends to do, leaving the issue of what it actually does an open question.

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CPI Changes On Energy: The Inflation Check

2019-10-13

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2019-10-13

CPI Changes on Energy, 1995-2019
After constantly running through what the FOMC gets (very) wrong, let’s give them some credit for what they got right. Though this will end up as a backhanded compliment, still. After having spent all of 2018 forecasting accelerating inflation indices, from around New Year’s Day forward policymakers notably changed their tune.

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Monthly Macro Monitor: Doom & Gloom, Good Grief

2019-10-12

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2019-10-12

Economic Growth & Investment, October 2019
When I first got in this business oh so many years ago, my mentor told me that I shouldn’t waste my time worrying about the things everyone else was worrying about. As I’ve related in these missives before, he called those things “well worried”. His point was that once everyone was aware of something it was priced into the market and not worth your time.

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The Consequences Of ‘Transitory’

2019-10-08

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2019-10-08

Euro Interbank, 2019
Europe’s QE, as noted this weekend, is off to a very rough start. In the bond market and in inflation expectations, the much-ballyhooed relaunch of “accommodation” is conspicuously absent. There was a minor back up in yields between when the ECB signaled its intentions back in August and the few weeks immediately following the actual announcement.

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ISM Spoils The Bond Rout!!!

2019-10-03

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2019-10-03

Federal Reserve Empire States Manu. Index, 2004-2019
With China closed for its National Day Golden Week holiday, the stage was set for Japan to steal the market spotlight. If only briefly. The Bank of Japan announced last night that it had had enough of the JGB curve. The 2s10s very nearly inverted last month and BoJ officials released preliminary plans to steepen it back out.

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