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manufacturing

Look For The Preponderance Of The Evidence, Don’t Rely On One Factor

The headline on my LinkedIn page on Friday (October 4th) read: “Jobless rate reaches half-century low, HP plans to cut up to 9,000 jobs…” Is this good news about jobs, or bad? I’ve learned many times over the years to rely on the preponderance of the evidence, and not on any single indicator. The jobs numbers, themselves indicate that the economy is still expanding. But, the lower level of job creation, along with …Read More

Where’s The Recession, You Ask? Reprise

The narrative is that the “soft patch”, now so evident in U.S. data, is temporary, related to factors like weather, the government shut-down, and/or trade/tariffs. The Atlanta Fed, where GDP forecasts always seem to come out on the high side, put Q1’s real GDP growth at just +0.3%. And, the N.Y. Fed’s model says +0.9%. In any case, even the most ardent bulls have at least recognized that current data …Read More

No Recession in Sight; Just Volatility, End of Cycle Worries

As June began, market volatility re-emerged with both the stock and bond markets fluctuating wildly on a daily basis. The good news is that it looks like U.S. manufacturing got a bit stronger entering Q2, as did consumer spending. So, Q2’s U.S. GDP will be stronger than Q1’s. The May employment report, too, was stronger than anticipated; more good U.S. news. Unfortunately, the rest of the world, especially Europe and …Read More

The Italian Job Shouldn’t Have Been Such a Shock

The good news is that it looks like manufacturing got a bit stronger entering Q2, and consumer spending was slightly better, too. So, Q2’s U.S. GDP may actually be a tad stronger than Q1’s. But, the good news stops there, as the rest of the world, especially Europe, appears to have hit a wall, a barrier that has displayed itself for the last couple of months, but, till now, was …Read More

Before Political Correctness, We Called This “Stagflation”

“Those that cannot remember the past are condemned to repeat it.” (George Santayana 1863-1952). This time, indeed, could be different. It certainly is in the realm of possibility. But, the odds are against it. One doesn’t get up on a particular morning and find an entry in the calendar on our smartphone, like “Cinco de Mayo” or “Mother’s Day,” that says “Start Day: National Recession.” In fact, the National Bureau …Read More

The Fed and the Phillips Curve

Deflation is the Order of the Day The Fed was established in December, 1913 after the Panic of 1907 (the latest in a series of financial panics dating back to the middle of the 19th century) put the economy into a severe recession via bank runs and subsequent bank failures.  The Fed’s original purpose was to provide the nation with a safer, more flexible, and more stable monetary and financial …Read More