The Washington Lobotomy Factory Is In High Gear

From the NY Times:As Mr. Obama made his comments at the announcement of the pay freeze, the bipartisan commission he established in February to propose ways to reduce the growth of the national debt entered a final two days of negotiations over combinations of spending cuts and revenue increases. In a sign of the struggle to find a compromise that could attract Democratic and Republicans votes, the commission chairmen — Alan K. Simpson, a former Senate Republican leader, and Erskine B. Bowles, a chief of staff to President Bill Clinton...

Read More

State Tax Revenues improving -- but not enough (w/ update)

- by New Deal democratIn terms of the normal progression of leading/coincident/lagging data, the Great Recession and the recovery thereafter have almost completely given the lie to the proposition that "it's different this time." But one thing that has been different about this recovery, and has had a very important effect on the generation of jobs,...

Read More

U.S. Economic Status, Part II: Manufacturing

Manufacturing activity was one of the primary drivers of the latest expansion. It was one of the first economic areas to show a rebound. However, over the past few months it has since slowed a bit, although it is hardly crashing. I believe the best description of the growth in this sector is "moderating."Overall industrial production has bounced...

Read More

Yesterday's Market

The dollar's rebound has been the most important story over the last few weeks, which illustrates that the dollar is still a safe haven in troubled times. Yesterday's price analysis is still solid: the shorter EMAs are moving higher (a) and we have two price targets: the 61.8% Fibonacci level (b) and the 200 day EMA (c). I've added the underlying...

Read More

Euro Worries Persist

The Euro continues to take a battering, as markets focus on the structural problems of the Eurozone.The focus is now on the Spanish and Italian economies, and their ability to roll over their debt.Were either Spain or Italy to need a bailout, the ability of the Eurozone to provide the necessary funds is in doubt. Needless to say the real danger is that the requirement for a bailout of these two countries, now that the markets are focusing on them, is becoming a very real possibili...

Read More

Well, at least "DrDumb" picked the right screen name ...

- by New Deal democratOne rule of netiquette as that you're not supposed to "feed the trolls," but how can I help it when they're so stupid??? After I posted about the initial jobless claims last Wednesday, I got an email from a troll named "drdoom" which read, in its entirety:Hey Bozo you can take your charts and shove them up your ***....followed...

Read More

Will This Be A Better Holiday Season?

From Bloomberg:The average shopper in the U.S. spent 6.4 percent more over Thanksgiving weekend than last year as more people picked up jewelry and toys, heartened by the economic rebound. About 212 million shoppers went to stores and websites over the holiday weekend, on average spending $365.34, the National Retail Federation said yesterday. The proportion of sales online rose to more than one-third of the total, according to the Washington-based trade group. Retailers lured people into stores with promotions like Wal-Mart Stores Inc.’s $5...

Read More

U.S. Economic Status Part I: the Consumer

As we get near the end of the year, it seems appropriate to start looking at a macro view of the US economy to see just exactly where we are in the recovery. Today I'll start by looking at the consumer. I'll also be looking at the manufacturing and service sectors along with employment, gross domestic investment and the export/import balance. There...

Read More

The Irish Bailout

Ajai Chopra, the head of the International Monetary Fund's mission in Ireland, has been forced to defend the terms of the Euro 85BN bailout agreed with Ireland over the weekend.Ireland will be paying 5.8% interest on the loan which, according to the IMF, is a better deal than Ireland would have secured elsewhere.The short term reaction of the markets has been cautiously positive. However, it is clear that the structural problems within the Eurozone remain. Until these issues are addressed, the pressure on the Euro and weaker members of the Eurozone...

Read More

Yesterday's Market

Actually, as I was out of the market for last week on vacation, this is a great opportunity to look at the market and see where all the markets are.First, the overall trend in the SPYs is one of consolidation. Prices have broken an uptrend (a), but are now consolidating in a triangle pattern (b).Notice that prices are consolidating between lines (a)...

Read More

Weekly Indicators: Black Friday Edition

- by New Deal democratThis week's big number, without doubt, was the drop in initial jobless claims to 407,000, the lowest reading in two and a half years. At long last layoffs have broken to the downside from this year's stagnation, boding well for nonfarm payrolls. In other news in a truncated week, personal income and spending both rose nicely in October, as did PCE's (see Calculated Risk for a nice trend graph). New and existing home sales declined to their summer levels. This really just shows bottom bouncing since April - certainly not good,...

Read More

Contagion

The fears of the contagion, from the Irish sovereign debt crisis, spreading appear to be justified. Spain is now the target of the market's fear and greed.Spanish bond prices are rising, and the Euro is falling.The EU's bailout fund of Euro 1 Trillion will not be enough to prop up Spain, Greece, Ireland and Portugal.Something has got to gi...

Read More

No Risk!

The EU, seriously spooked that the Euro remains under siege, has issued a statement insisting that the Euro will not collapse.Klaus Regling, CEO of European Financial Stability Facility (EFSF), told the Bild: "There is zero dangerIt is inconceivable that the euro fails."Nonsense, it is perfectly conceivable that the Euro will collapse.The pressure on Greece, Ireland, Portugal and Spain is increasing day by day. At some stage, if these countries are to avoid total political and social collapse, they will have to free themselves from the constraining...

Read More

Happy Thanksgiving

With the exception of weekly indicators on Friday, we'll be back on Monday. Have a good and safe weeke...

Read More

Initial Jobless Claims GREAT: Durable Goods Numbers Very Bad

From Bloomberg:Applications for unemployment benefits in the U.S. fell more than forecast last week to the lowest level since July 2008, reinforcing evidence the labor market is healing. Jobless claims declined by 34,000 to 407,000 in the week ended Nov. 20, Labor Department figures showed today in Washington. The median projection of economists surveyed by Bloomberg News called for a drop to 435,000. The total number of people receiving unemployment insurance decreased to the lowest in two years, and those on extended payments also fell. Fewer...

Read More

Personal Savings & Spending as precursors to Economic Expansion & Job Growth

- by New Deal democratOne of the best short-term precursors to job growth (besides real retail sales) is GDP growth. Generally it takes 2% YoY GDP growth to generate job growth, so normalizing for that, there is a very clear relationship:Among the best longer-term precursors, as I explained back in July, is the "real personal savings rate." To update...

Read More

Productivity Increases Slowing Employment Growth

From Bloomberg:Not far from where Federal Reserve Chairman Ben S. Bernanke grew up, a revolution inside a Campbell Soup Co. plant explains why U.S. corporations are piling up profits -- with little need to hire more people. Workers such as “Big John” Filmore, a 28-year Campbell veteran, huddle every day with management in situation rooms before their shifts to find ways to save money for the company. Rising productivity is helping boost profit margins here in Maxton, North Carolina, where 858 workers turn out a billion meals a year, and at most...

Read More

GDP Increases 2.5%

Note -- I'm traveling with an old computer, so the daily charts won't be up until I return home next Monday.From the BEA:Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.5 percent in the third quarter of 2010, (that is, from the second quarter to the third quarter), according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 1.7 percent.The GDP estimates released today are...

Read More

Irish Hold All The Cards

Irish households are coming to grips with the true cost of accepting the EU/IMF bailout, and of remaining in the Euro (nothing in life comes free), if the Irish accept the terms dictated by the EU.It is estimated that the austerity package that the government will have to force through, in order to receive the bailout on the EU's terms, will cost the average Irish household £3K in increased taxes.What people don't seem to realise is that the Irish government can, to some extent, stick two fingers up to the EU wrt the terms and conditions being...

Read More

US Agriculture Leading Exports

From Bloomberg: The unemployment rate in North Dakota is 3.7 percent, and “if it wasn’t for cable news, we probably wouldn’t have any idea that the rest of the country was any different,” said Doug Johnson, co-owner of crop insurer TCI Insurance in West Fargo, who added six new employees this year. As businesses across the U.S. struggle to recover from the deepest recession since World War II and the national jobless rate remains stuck at 9.6 percent, Johnson has benefited from his location in the northern Great Plains, where a boom in commodities,...

Read More

The Story you're *not* reading about here

- by New Deal democratThis blog has been totally silent on the "Foreclosuregate" crisis - and after this post, likely will continue to be. That isn't an oversight or a blind spot on our part. It is intentional, and for a very good reason -- there's no public data available to back up an objective assessment. Bonddad recently added a tagline from Jon Stewart to this blog's title. For my part, I'd choose "The Data, the Whole Data, and Nothing But the Data." In short, we have made a conscious decision (that we are constantly revisiting!) to keep this...

Read More

Industrial Production Unchanged

I didn't get to this last week, but wanted to go into detail now while I've got time:From the Federal Reserve:Industrial production was unchanged in October after having fallen 0.2 percent in September. For the manufacturing sector, output gained 0.5 percent in October after having risen 0.1 percent in September. Factory production in September was initially reported to have decreased 0.2 percent, but incoming data on steel, fabricated metal products, machinery, and chemicals helped boost the index. The output of utilities dropped 3.4 percent in...

Read More

The Sea of Hope

Now that Ireland has formally admitted that it will accept a bailout from the EU/IMF, the real game can begin.Irish banks, despite the fact that they will receive a capital injection, are now effectively up for sale - all bidders welcome.The EU has warned the Irish government about the possible deal breaking problems of an election (to be held early next year). However, the Irish know full well (as does the EU) that the name of the game is "contagion avoidance". The EU cannot afford for this bailout to fail, if it did the risk of contagion spreading...

Read More

China is Holding Up Loan Growth

A quick note: I'm traveling this week, and the computer I brought has now taken one trip to many. Keeping multiple programs open at the same time (like Firefox and Quote Tracker) is a bit dicey. So, for the next two days, there won't be a Yesterday's Market piece. That will be back on Monday.From Bloomberg:China’s biggest banks are close to reaching annual lending quotas and plan to stop expanding their loan books to avoid exceeding the limits, according to four people with knowledge of the matter. Industrial & Commercial Bank of China...

Read More

Ireland Gets Bailed Out

From Bloomberg:Ireland applied for a bailout to help fund itself and save its banks, becoming the second euro member to seek a rescue from the European Union and the International Monetary Fund.Irish Prime Minister Brian Cowen said he expects talks on the package to be completed in the “next few weeks.” Finance Minister Brian Lenihan said the loan will be less than 100 billion euros ($137 billion), though he refused to give any further details at a press conference in Dublin today.“A small sovereign like Ireland faced with an outsized problem that...

Read More

Initial Jobless Claims vs. Payrolls -- where to next?

- by New Deal democratFourteen months ago, I wrote that Some time ago, Prof. Brad DeLong of Berkeley, thinking aloud with graph, drew a line across the 1991 and 2001 recessions and recoveries, making a "note to self" that it appeared that Initial Jobless Claims post those recessions had to decline to 400,000 or less before payroll jobs were added....

Read More