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5/7/2019 It’s Not the Economy – It’s Buy-Backs

There were three significant economic events since my last column: the GDP report, the Fed meeting, and the unemployment report. GDP The Q1 real GDP growth rate (3.2% annualized) surprised nearly everyone to the upside. And, of course, Wall Street characterized the headline number as proof that the “soft patch” had passed.  Never mind the details.  Of the 3.2% growth, nearly .7 percentage points came from inventory growth. This was …Read More

4/10/2019 Equity Market Appears to be Moving to the Sound of Its Own Drummer

There were several recent market moving reports, including some positive data on U.S. and Chinese manufacturing. But, the biggest news was the seemingly positive March employment data which sent equity markets up, as the initial take on the headline Establishment Survey (ES) data (+196k) fit the narrative that the soft economic patch is now passing and a recession will be avoided. Because it doesn’t fit the narrative, there has been …Read More

Ignore the Media’s Negative Take on Jobs: The Economy is Strong

Over the last couple of months, I have indicated that, because the seasonal adjustment process cannot handle significant weather deviation issues, the first quarter reported data (.1% Real GDP, for example) significantly understate the underlying strength of the economy.  Friday’s Establishment Survey (ES) employment report gave credence to that view.  Not only did April’s newly created jobs come in at 288,000, way above expectations (218,000), but February and March were …Read More