Category Archives: Uncategorized

Real GDP Chart Since 1947 With Trendline – 1st Quarter 2017

For reference purposes, below is a chart from Doug Short’s “Q1 GDP Advance Estimate: Real GDP Drops to .7 percent, Disappoints Forecast” post of April 28, 2017, depicting Real GDP, with a trendline, as depicted.  This chart reflects the Gross Domestic Product Q1 2017 Advance Estimate (pdf) of April 28, 2017:

U.S. Real GDP chart

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2387.90 as this post is written

Durable Goods New Orders – Long-Term Charts Through March 2017

Many people place emphasis on Durable Goods New Orders as a prominent economic indicator and/or leading economic indicator.

For reference, below are two charts depicting this measure.

First, from the St. Louis Fed site (FRED), a chart through March 2017, updated on April 27, 2017. This value is $238,713 ($ Millions):

(click on charts to enlarge images)

Durable Goods New Orders

Second, here is the chart depicting this measure on a “Percentage Change from a Year Ago” basis:

DGORDER Percent Change From Year Ago

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Manufacturers’ New Orders:  Durable Goods [DGORDER]; U.S. Department of Commerce: Census Bureau; accessed April 27, 2017;

http://research.stlouisfed.org/fred2/series/DGORDER

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2391.48 as this post is written

Disturbing Charts (Update 26)

I find the following charts to be disturbing.   These charts would be disturbing at any point in the economic cycle; that they (on average) depict such a tenuous situation now – 94 months after the official (as per the September 20, 2010 NBER BCDC announcement) June 2009 end of the recession – is especially notable.

These charts raise a lot of questions.  As well, they highlight the “atypical” nature of our economic situation from a long-term historical perspective.

All of these charts are from the Federal Reserve, and represent the most recently updated data.

(click on charts to enlarge images)

Housing starts (last updated 3-16-17):

HOUST

US. Bureau of the Census, Housing Starts: Total: New Privately Owned Housing Units Started [HOUST], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/HOUST/, April 17, 2017.

The Federal Deficit (last updated 1-9-17):

U.S. Federal Deficit

US. Office of Management and Budget, Federal Surplus or Deficit [-] [FYFSD], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/FYFSD/, April 17, 2017.

Federal Net Outlays (last updated 1-9-17):

Federal Net Outlays

US. Office of Management and Budget, Federal Net Outlays [FYONET], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/FYONET/, April 17, 2017.

State & Local Personal Income Tax Receipts  (% Change from Year Ago)(last updated 3-30-17):

ASLPITAX Percent Change From Year Ago

US. Bureau of Economic Analysis, State and local government current tax receipts: Personal current taxes: Income taxes [ASLPITAX], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/ASLPITAX/, April 17, 2017.

Total Loans and Leases of Commercial Banks (% Change from Year Ago)(last updated 4-14-17):

TOTLL Percent Change From Year Ago

Board of Governors of the Federal Reserve System (US), Loans and Leases in Bank Credit, All Commercial Banks [TOTLL], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/TOTLL/, April 17, 2017.

Bank Credit – All Commercial Banks (% Change from Year Ago)(last updated 4-14-17):

TOTBKCR Percent Change From Year Ago

Board of Governors of the Federal Reserve System (US), Bank Credit of All Commercial Banks [TOTBKCR], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/TOTBKCR/, April 17, 2017.

M1 Money Multiplier (last updated 4-6-17):

M1 Money Multiplier

Federal Reserve Bank of St. Louis, M1 Money Multiplier [MULT], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/MULT/, April 17, 2017.

Median Duration of Unemployment (last updated 4-7-17):

Median Duration Of Unemployment

US. Bureau of Labor Statistics, Median Duration of Unemployment [UEMPMED], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/UEMPMED/, April 17, 2017.

Labor Force Participation Rate (last updated 4-7-17):

Labor Force Participation Rate

US. Bureau of Labor Statistics, Civilian Labor Force Participation Rate [CIVPART], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/CIVPART/, April 17, 2017.

The Chicago Fed National Activity Index (CFNAI) 3-month moving average (CFNAI-MA3)(last updated 3-20-17):

CFNAI-MA3

Federal Reserve Bank of Chicago, Chicago Fed National Activity Index: Three Month Moving Average [CFNAIMA3], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/CFNAIMA3/, April 17, 2017.

I will continue to update these charts on an intermittent basis as they deserve close monitoring…

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2349.01 as this post is written

Charts Indicating Economic Weakness – April 12, 2017

Throughout this site there are many charts of economic indicators.  At this time, the readings of various indicators are especially notable.  While many are still indicating economic growth, others depict (or imply) various degrees of weakness.

Below are a small sampling of charts that depict greater degrees of weakness and/or other worrisome trends, and a brief comment for each:

Consumer Spending

In the March 23, 2017 post (“‘Hidden’ Weakness In Consumer Spending?“) I wrote of various indications that consumer spending may be (substantially) less than what is depicted by various mainstream indicators.  There are widespread consequences for the U.S. economy, including the implications regarding the substantial number of retail store closures.

Auto Sales

One aspect of consumer spending, auto sales, have experienced significant growth over the post-2009 period, and the current reading (through March) is 16.529 million vehicles:

Light vehicle sales

source:  U.S. Bureau of Economic Analysis, Light Weight Vehicle Sales: Autos and Light Trucks [ALTSALES], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed April 10, 2017:

https://fred.stlouisfed.org/series/ALTSALES

While some believe that auto sales have peaked, what is more worrisome is various underlying dynamics of these sales.  While an exhaustive discussion of such dynamics would be exceedingly lengthy, various notable factors include the degree to which (ultra-) cheap financing and relaxed financing terms are aiding sales, as well as the current amount of discounting and various new- and used-car inventory levels.  In essence, the current business model for the entire automotive industry appears vulnerable, with wide-ranging, substantial economic implications.

Heavy Truck Sales

Another area of vehicle sales which continues to indicate disconcerting trends is sales of Heavy Trucks, defined as trucks with more than 14,000 pounds gross vehicle weight.  Below is a chart of the sales trend since 1968, with a value of .366 million SAAR through March 2017 as of the April 10 update:

Heavy Truck Sales

source:  U.S. Bureau of Economic Analysis, Motor Vehicle Retail Sales: Heavy Weight Trucks [HTRUCKSSAAR], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed April 10, 2017:

https://fred.stlouisfed.org/series/HTRUCKSSAAR

A chart depicting this measure on a “Percent Change From Year Ago” basis:

Heavy Truck Sales Percent Change From Year Ago

GDP Estimates

While there are many GDP forecasts indicating GDP growth exceeding 2% for 2017, the first quarter GDP estimate provided by the Federal Reserve Bank of Atlanta “GDP Now” is distinctly different than the consensus.  As of the April 7, 2017 update, the estimate for the 1st Quarter of 2017 is .6%.

What is notable in this estimate is the persistent and significant degree of decline.

While I don’t believe in putting undue emphasis on one estimate, it does serve as yet another indication that economic activity may be (substantially) below the consensus estimates.

“Reflation”

One aspect of the U.S. economy that has been widely discussed since the November 2016 elections is that of “reflation.”

While, on an aggregate basis, some “reflation” appears to have recently occurred, it appears to be muted in nature.  In addition, various factors indicate that such “reflation” will be transitory in nature.

Indications of the above are various, and include the persistently subdued 10-Year Treasury Yield (at 2.361% as of the April 10 close) and the levels seen in the yield curve.

Here is a chart of the 10-Year Treasury Yield, from 1990:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

10-Year Treasury Yield since 1990

The level of current inflation and the possibility of deflation (when the CPI goes below zero) is a vastly complex topic, and as such isn’t suitably discussed in a brief manner.  I have discussed the issue of deflation extensively as I continue to believe that outright sustained deflation will occur.  As I have stated in past commentaries, I don’t believe that surveys or “market-based” measures concerning deflation will provide adequate “advance warning” of impending deflation.

Other Indicators

As well, many other indicators – including vastly problematical conditions in current and especially future employment – and other areas mentioned on this site indicate economic weakness if not outright (substantially) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2353.78 as this post is written

Average Hourly Earnings Trends

I have written many blog posts concerning the worrisome trends in income and earnings.

Along these lines, one of the measures showing disconcerting trends is that of hourly earnings.

While the concept of hourly earnings can be defined and measured in a variety of ways, below are a few charts that I believe broadly illustrate problematic trends.

The first chart depicts Average Hourly Earnings Of All Employees: Total Private (FRED series CES0500000003)(current value = $26.14):

(click on chart to enlarge image)(chart last updated 4-7-17)

CES0500000003

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Average Hourly Earnings of All Employees:  Total Private [CES0500000003] ; U.S. Department of Labor: Bureau of Labor Statistics; accessed April 7, 2017:

http://research.stlouisfed.org/fred2/series/CES0500000003

This next chart depicts this same measure on a “Percentage Change From A Year Ago” basis.   While not totally surprising, I find the decline from 2009 and subsequent trend to be disconcerting:

(click on chart to enlarge image)(chart last updated 4-7-17)

CES0500000003 percent change from year ago

There are slightly different measures available from a longer-term perspective. Pictured below is another measure, the Average Hourly Earnings of Production and Nonsupervisory Employees – Total Private (FRED series AHETPI)(current value = $21.90):

(click on chart to enlarge image)(chart last updated 4-7-17)

AHETPI

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Average Hourly Earnings of Production and Nonsupervisory Employees:  Total Private [AHETPI] ; U.S. Department of Labor: Bureau of Labor Statistics;  accessed April 7, 2017:

http://research.stlouisfed.org/fred2/series/AHETPI

Pictured below is this AHETPI measure on a “Percentage Change From A Year Ago” basis.   While not totally surprising, I find the decline from 2009 and subsequent trend to be disconcerting:

(click on chart to enlarge image)(chart last updated 4-7-17)

AHETPI percent change from year ago

I will continue to actively monitor these trends, especially given the post-2009 dynamics.

_________

I post various economic indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2359.45 this post is written

April 4, 2017 Gallup Poll Results On Economic Confidence – Notable Excerpts

On April 4, 2017 Gallup released the poll results titled “U.S. Economic Confidence Index Unchanged in March.”

Notable excerpts include:

Still, Americans’ economic confidence has remained positive overall for 20 straight weeks — since the week after the presidential election in November — making it the longest positive streak since Gallup began tracking the measure.

also:

Gallup’s U.S. Economic Confidence Index is the average of two components: how Americans rate current economic conditions and whether they feel the economy is improving or getting worse. The index has a theoretical maximum of +100 if all Americans were to say the economy is doing well and improving, and a theoretical minimum of -100 if all Americans were to say the economy is doing poorly and getting worse.

In March, one-third of U.S. adults (33%) described economic conditions as “excellent” or “good,” while 20% rated them as “poor.” This resulted in a current conditions score of +13 for the month — the same as in February.

Meanwhile, 49% of U.S. adults said economic conditions were “getting better,” while 45% said they were “getting worse,” resulting in an economic outlook score of +4 — similar to February’s +3 for this component.

Here is an accompanying chart of the two components of the Gallup Economic Confidence Index, discussed above:

Gallup U.S. Economic Confidence components

Here is an accompanying chart of the Gallup Economic Confidence Index:

Gallup U.S. Economic Confidence Index

 

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2351.00 as this post is written

Median Household Income Chart

I have written many blog posts concerning the worrisome trends in income and earnings.

Doug Short, in his March 30, 2017 post titled “February Real Median Household Income:  Higher in February” produced the chart below.  It is based upon data from Sentier Research, and it shows both nominal and real median household incomes since 2000, as depicted.  As one can see, post-recession real median household income (seen in the blue line since 2009) remains worrisome.

(click on chart to enlarge image)

U.S. Median Household Income

As Doug mentions in his aforementioned post, regarding the change in real median household incomes:

As the excellent data from Sentier Research makes clear, the mainstream U.S. household was struggling before the Great Recession. At this point, real household incomes are about where they were during the Great Recession.

Among other items seen in his blog post is a chart depicting each of the two (nominal and real household incomes) data series’ percent change over time since 2000.

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2364.27 as this post is written

Consumer Confidence Surveys – As Of March 28, 2017

Doug Short had a blog post of March 28, 2017 (“March Consumer Confidence Highest Since 2000“) in which he presents the latest Conference Board Consumer Confidence and Thomson/Reuters University of Michigan Consumer Sentiment Index charts.  They are presented below:

(click on charts to enlarge images)

Conference Board Consumer Confidence

University of Michigan Consumer Confidence

There are a few aspects of the above charts that I find highly noteworthy.  Of course, until the sudden upswing in 2014, the continued subdued absolute levels of these two surveys was disconcerting.

Also, I find the “behavior” of these readings to be quite disparate as compared to the other post-recession periods, as shown in the charts between the gray shaded areas (the gray areas denote recessions as defined by the NBER.)

While I don’t believe that confidence surveys should be overemphasized, I find these readings to be very problematical, especially in light of a variety of other highly disconcerting measures highlighted throughout this site.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2360.96 as this post is written

Markets During Periods Of Federal Reserve Intervention – March 27, 2017 Update

In the August 9, 2011 post (“QE3 – Various Thoughts“) I posted a chart that depicted the movements of the S&P500, 10-Year Treasury Yield and the Fed Funds rate spanning the periods of various Federal Reserve interventions since 2007.

For reference purposes, here is an updated chart (through March 27, 2017) from Doug Short’s blog post of March 27 (“Treasury Snapshot:  10-Year Note at 2.38“):

Federal Reserve Intervention and U.S. markets

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2359.64 as this post is written

Durable Goods New Orders – Long-Term Charts Through February 2017

Many people place emphasis on Durable Goods New Orders as a prominent economic indicator and/or leading economic indicator.

For reference, below are two charts depicting this measure.

First, from the St. Louis Fed site (FRED), a chart through February 2017, updated on March 24, 2017. This value is $235,386 ($ Millions):

(click on charts to enlarge images)

Durable Goods New Orders

Second, here is the chart depicting this measure on a “Percentage Change from a Year Ago” basis:

DGORDER percent change from year ago

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Manufacturers’ New Orders:  Durable Goods [DGORDER]; U.S. Department of Commerce: Census Bureau; accessed March 24, 2017;

http://research.stlouisfed.org/fred2/series/DGORDER

_________

I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2353.87 as this post is written