Tag Archives: economic weakness

Charts Indicating Economic Weakness – August 2018

U.S. Economic Indicators

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.  This post is the latest in a series of posts indicating U.S. economic weakness or a notably low growth rate.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.  As seen in the August 2018 Wall Street Journal Economic Forecast Survey the consensus (average estimate) among various economists is for 3.0% GDP growth in 2018 and 2.4% GDP growth in 2019.  However,  there are other broad-based economic indicators that seem to imply a weaker growth rate.

As well, it should be remembered that GDP figures can be (substantially) revised.

Charts Indicating U.S. Economic Weakness

Below are a small sampling of charts that depict weak growth or contraction, and a brief comment for each:

Total Federal Receipts

“Total Federal Receipts” growth continues to be intermittent in nature since 2015.  As well, the level of growth does not seem congruent to the (recent) levels of economic growth as seen in aggregate measures such as Real GDP.

“Total Federal Receipts” through July had a last value of $225,266 Million.  Shown below is  the measure displayed on a “Percent Change From Year Ago” basis with value -2.9%, last updated August 10, 2018:

MTSR133FMS_8-10-18 225266 -2.9 Percent Change From Year Ago

source:  U.S. Department of the Treasury. Fiscal Service, Total Federal Receipts [MTSR133FMS], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed August 11, 2018:

https://fred.stlouisfed.org/series/MTSR133FMS

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Taxes On Corporate Income

Another measure that depicts weakness is that of “Federal government current tax receipts: Taxes on corporate income.”  Through the first quarter the value is $149.029 Billion.  Shown below is the chart, last updated July 27, 2018:

B075RC1Q027SBEA_7-27-18 149.029

source:  U.S. Bureau of Economic Analysis, Federal government current tax receipts: Taxes on corporate income [B075RC1Q027SBEA], retrieved from FRED, Federal Reserve Bank of St. Louis;  accessed August 9, 2018:

https://fred.stlouisfed.org/series/B075RC1Q027SBEA

Here is a chart of the measure, on a “Percent Change From Year Ago” basis with value of -48.6%, through the first quarter, last updated July 27, 2018:

B075RC1Q027SBEA Percent Change From Year Ago

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The Aruoba-Diebold-Scotti Business Conditions Index (ADS Index)

While the 2nd quarter GDP (Advance Estimate)(pdf) was 4.1%, there are other broad-based economic indicators that seem to imply a weaker growth rate.

Among the broad-based economic indicators that imply weaker growth is that of the Aruoba-Diebold-Scotti Business Conditions Index (ADS Index.)  Below is a two-year chart of the index through August 4, 2018, with a value of .047, as of the August 8 update:

ADS Index

source:  Federal Reserve Bank of Philadelphia, Aruoba-Diebold-Scotti Business Conditions Index (ADS Index)

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Total Construction Spending:  Commercial

“Total Private Construction Spending: Commercial” is a measure of construction exhibiting weak YoY growth.   This measure through June had a last value of $90,991 Million.  Shown below is the measure displayed on a “Percent Change From Year Ago” basis with a value of 1.1%, last updated August 1, 2018:

TLCOMCONS_8-1-18 90991 1.1 Percent Change From Year Ago

source:  U.S. Bureau of the Census, Total Construction Spending: Commercial [TLCOMCONS], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed August 9, 2018:

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

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Real Hourly Earnings

The level and growth rates of wages and household earnings continues to be (highly) problematical.  I have extensively discussed these worrisome trends in income and earnings.

As seen in many measures the problem is chronic (i.e long-term) in nature.

Shown below is a chart depicting the 12-month percent change in real average hourly and weekly earnings for private sector employees from June 2008 – June 2018.  (July 2018 was unchanged from June 2018, and it decreased .2% YoY (i.e. compared to July 2017.))  As seen in the chart below, growth in this measure over the time period depicted has been intermittent, volatile, and, especially since 2017, weak:

Real Average Hourly Earnings

source:  Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Real average hourly earnings unchanged from June 2017 to June 2018 on the Internet at https://www.bls.gov/opub/ted/2018/real-average-hourly-earnings-unchanged-from-june-2017-to-june-2018.htm(visited August 10, 2018).

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Other Indicators

As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2833.28 as this post is written

Charts Indicating Economic Weakness – July 2018

U.S. Economic Indicators

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.  This post is the latest in a series of posts indicating U.S. economic weakness or a notably low growth rate.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.  As seen in the July 2018 Wall Street Journal Economic Forecast Survey the consensus (average estimate) among various economists is for 2.9% GDP growth in 2018.  However,  there are other broad-based economic indicators that seem to imply a weaker growth rate.

As well, it should be remembered that GDP figures can be (substantially) revised.

Charts Indicating U.S. Economic Weakness

Below are a small sampling of charts that depict weak growth or contraction, and a brief comment for each:

Total Federal Receipts

“Total Federal Receipts” growth continues to be intermittent in nature since 2015.  As well, the level of growth does not seem congruent to the (recent) levels of economic growth as seen in aggregate measures such as Real GDP.

“Total Federal Receipts” through June had a last value of $316,278 Million.  Shown below is  the measure displayed on a “Percent Change From Year Ago” basis with value -6.6%, last updated July 12, 2018:

MTSR133FMS

source:  U.S. Department of the Treasury. Fiscal Service, Total Federal Receipts [MTSR133FMS], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed July 12, 2018:

https://fred.stlouisfed.org/series/MTSR133FMS

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The Yield Curve

Many people believe that the Yield Curve is a leading economic indicator for the United States economy.

On March 1, 2010, I wrote a post on the issue, titled “The Yield Curve As A Leading Economic Indicator.”

While I continue to have the stated reservations regarding the “yield curve” as an indicator, I do believe that it should be monitored.

As an indication of the yield curve (i.e. a yield curve proxy), below is a weekly chart from January 1, 1990 through July 11, 2018.  The top two plots show the 10-Year Treasury and 2-Year Treasury yields.  The third plot shows the (yield) spread between the 10-Year Treasury and 2-Year Treasury, with the July 11, 2018 closing value of .27%.  The bottom plot shows the S&P500:

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

Yield Curve proxy

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U.S. Auto Sales

U.S. auto sales have experienced significant growth over the post-2009 period as seen in the chart shown below. The current reading (through June) is 17.381 million vehicles SAAR.  Of great economic importance is whether auto sales have peaked, which I believe has occurred, as well as other problematical characteristics of the light vehicle market.  A long-term chart is shown below:

Light Weight Vehicle Sales: Autos and Light Trucks

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 July 10, 2018:

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

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Vehicle Miles Traveled

I find the flagging growth trend in the “Vehicle Miles Traveled” (NSA) measure since 2015 to be notable.

“Vehicle Miles Traveled” through April had a last value of 272,442 Million.  Shown below is  the measure displayed on a “Percent Change From Year Ago” basis with value -.2%, last updated July 2, 2018:

TRFVOLUSM227NFWA_7-2-18 -.2 Percent Change From Year Ago

source:   U.S. Federal Highway Administration, Vehicle Miles Traveled [TRFVOLUSM227NFWA], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed July 12, 2018:

https://fred.stlouisfed.org/series/TRFVOLUSM227NFWA

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Alternate Growth Trend Measures

Another facet of economic activity is seen in the ratio of the Conference Board’s Coincident Composite Index to the Lagging Composite Index.  I interpret the trends seen in this measure to be disconcerting, as the ratio has generally been sinking for years:

Conference Board Coincident To Lagging Ratio

source:  Haver’s June 21, 2018 post (“U.S. Leading Economic Indicators’ Rate of Increase Eases“)

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Other Indicators

As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2798.29 as this post is written

Charts Indicating Economic Weakness – June 2018

U.S. Economic Indicators

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.  This post is the latest in a series of posts indicating U.S. economic weakness or a notably low growth rate.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.  As seen in the June 2018 Wall Street Journal Economic Forecast Survey the consensus (average estimate) among various economists is for 2.9% GDP growth in 2018.  However,  there are other broad-based economic indicators that seem to imply a weaker growth rate.

As well, it should be remembered that GDP figures can be (substantially) revised.

Charts Indicating U.S. Economic Weakness

Below are a small sampling of charts that depict weak growth or contraction, and a brief comment for each:

Total Federal Receipts

“Total Federal Receipts” growth continues to be intermittent in nature since 2015.  As well, the level of growth does not seem congruent to the (recent) levels of economic growth as seen in aggregate measures such as Real GDP.

“Total Federal Receipts” through May had a last value of $217,075 Million.  Shown below is  displayed on a “Percent Change From Year Ago” basis with value -9.7%, last updated June 12, 2018:

Monthly Treasury Receipts Percent Change From Year Ago

source:  U.S. Department of the Treasury. Fiscal Service, Total Federal Receipts [MTSR133FMS], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed June 13, 2018:

https://fred.stlouisfed.org/series/MTSR133FMS

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Underperformance Of Consumer Staples Stocks

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, including overall retail sales.

One recent development that appears to be a problematical aspect of consumer spending is the performance of the consumer staples stocks.  As one can see in the chart below, there has been a marked relative weakness in these stocks (with the XLP serving as a proxy).  The chart shows a 10-year daily depiction of the XLP (top plot), the S&P500 (middle plot) and XLP:S&P500 ratio (bottom plot.)  While there can be various interpretations and reasons for this underperformance, it does appear to represent a “red flag” especially considering other problematical indications concerning consumer spending:

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

XLP v S&P500 chart

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Unemployment

I have written extensively concerning unemployment, as the current and future unemployment issue is of tremendous importance.

The consensus belief is that employment is robust, citing total nonfarm payroll growth and the current unemployment rate of 3.8%.  However, my analyses continue to indicate that the conclusion that employment is strong is incorrect.  While the unemployment rate indicates that unemployment is (very) low, closer examination indicates that this metric is, for a number of reasons, highly misleading.

My analyses indicate that the underlying dynamics of the unemployment situation remain exceedingly worrisome, especially with regard to the future.  These dynamics are numerous and complex, and greatly lack recognition and understanding, especially as how from an “all-things-considered” standpoint they will evolve in an economic and societal manner.  I have recently written of the current and future U.S. employment situation on the “U.S. Employment Trends” page.

While there are many charts that can be shown, one that depicts a worrisome trend is the  Civilian Labor Force Participation Rate for those with a Bachelor’s Degree and Higher, 25 years and over.  Among disconcerting aspects of this measure is the long-term (most notably the post-2009) trend, especially given this demographic segment.

The current value as of the June 1, 2018 update (reflecting data through the May employment report) is 74.1%:

Civilian Labor Force Participation Rate: Bachelor's Degree and Higher, 25 years and over

source:  U.S. Bureau of Labor Statistics, Civilian Labor Force Participation Rate: Bachelor’s Degree and Higher, 25 years and over [LNS11327662], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed June 11, 2018:

https://fred.stlouisfed.org/series/LNS11327662

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Loan Demand And Related Measures

As seen in previous updates, various aspects of lending growth and related measures have shown a marked slowing in the growth rate.  Here is a measure, Net Percentage of Domestic Banks Reporting Stronger Demand for Commercial and Industrial Loans from Large and Middle-Market Firms, that shows a decline:

Net Percentage of Domestic Banks Reporting Stronger Demand for Commercial and Industrial Loans from Large and Middle-Market Firms

source:  Board of Governors of the Federal Reserve System (US), Net Percentage of Domestic Banks Reporting Stronger Demand for Commercial and Industrial Loans from Large and Middle-Market Firms [DRSDCILM], retrieved from FRED, Federal Reserve Bank of St. Louis;  accessed June 11, 2018:

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

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Wages And Earnings

The level and growth rates of wages and household earnings continues to be (highly) problematical.  I have extensively discussed these worrisome trends in income and earnings.

As seen in many measures the problem is chronic (i.e long-term) in nature.

Shown below is a chart depicting the 12-month percent change in real average hourly and weekly earnings for private sector employees from January 2008 – April 2018.  As seen in the chart, growth in this measure over the time period depicted has been intermittent, volatile, and, especially since 2017, weak:

 12-month percent change in real average hourly and weekly earnings

source: Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Real average hourly earnings up 0.2 percent for all private employees from April 2017 to April 2018 on the Internet at https://www.bls.gov/opub/ted/2018/real-average-hourly-earnings-up-0-point-2-percent-for-all-private-employees-april-2017-to-april-2018.htm(visited June 11, 2018).

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Other Indicators

As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2786.85 as this post is written

Charts Indicating Economic Weakness – May 2018

U.S. Economic Indicators

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.  This post is the latest in a series of posts indicating U.S. economic weakness or a notably low growth rate.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.  As seen in the May 2018 Wall Street Journal Economic Forecast Survey the consensus among various economists is for 2.9% GDP growth in 2018.  However,  there are other broad-based economic indicators that seem to imply a weaker growth rate.

As well, it should be remembered that GDP figures can be (substantially) revised.

Charts Indicating U.S. Economic Weakness

Below are a small sampling of charts that depict weak growth or contraction, and a brief comment for each:

Total Federal Receipts

“Total Federal Receipts” growth continues to be intermittent in nature since 2015.  As well, the level of growth does not seem congruent to the (recent) levels of economic growth as seen in aggregate measures such as Real GDP.

“Total Federal Receipts” through April had a last value of $510,447 Million.  Shown below is  displayed on a “Percent Change From Year Ago” basis with value 12.0%, last updated May 10, 2018:

Total Federal Receipts Percent Change From Year Ago

source:  U.S. Department of the Treasury. Fiscal Service, Total Federal Receipts [MTSR133FMS], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed May 11, 2018:

https://fred.stlouisfed.org/series/MTSR133FMS

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Commercial And Industrial Loans, All Commercial Banks

“Commercial And Industrial Loans, All Commercial Banks”  through April had a last value of $2162.8113 Billion.  The growth in such loans continues to be at a relatively low level.  Shown below is the measure displayed on a “Percent Change From Year Ago” basis with value 3.3%, last updated May 11, 2018:

BUSLOANS Percent Change From Year Ago

source:  Board of Governors of the Federal Reserve System (US), Commercial and Industrial Loans, All Commercial Banks [BUSLOANS], retrieved from FRED, Federal Reserve Bank of St. Louis May 11, 2018:

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

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Underperformance Of Consumer Staples Stocks

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, including overall retail sales.

One recent development that appears to be a problematical aspect of consumer spending is the performance of the consumer staples stocks.  As one can see in the chart below, there has been a marked relative weakness in these stocks (with the XLP serving as a proxy).  The chart shows a 10-year daily depiction of the XLP (top plot), the S&P500 (middle plot) and XLP:S&P500 ratio (bottom plot.)  While there can be various interpretations and reasons for this underperformance, it does appear to represent a “red flag” especially considering other problematical indications concerning consumer spending:

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

XLP chart

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The Yield Curve

Many people believe that the Yield Curve is a leading economic indicator for the United States economy.

On March 1, 2010, I wrote a post on the issue, titled “The Yield Curve As A Leading Economic Indicator.”

While I continue to have the stated reservations regarding the “yield curve” as an indicator, I do believe that it should be monitored.

As an indication of the yield curve (i.e. a yield curve proxy), below is a weekly chart from January 1, 1990 through May 11, 2018.  The top two plots show the 10-Year Treasury and 2-Year Treasury yields.  The third plot shows the (yield) spread between the 10-Year Treasury and 2-Year Treasury, with the May 11, 2017 closing value of .43%.  The bottom plot shows the S&P500:

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

Yield Curve proxy

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Unemployment

I have written extensively concerning unemployment, as the current and future unemployment issue is of tremendous importance.

The consensus belief is that employment is robust, citing total nonfarm payroll growth and the current unemployment rate of 3.9%.  However, my analyses continue to indicate that the conclusion that employment is strong is incorrect.  While the unemployment rate indicates that unemployment is (very) low, closer examination indicates that this metric is, for a number of reasons, highly misleading.

My analyses indicate that the underlying dynamics of the unemployment situation remain exceedingly worrisome, especially with regard to the future.  These dynamics are numerous and complex, and greatly lack recognition and understanding, especially as how from an “all-things-considered” standpoint they will evolve in an economic and societal manner.  I have recently written of the current and future U.S. employment situation on the “U.S. Employment Trends” page.

While there are many charts that can be shown, one that depicts a worrisome trend is the Employment Population Ratio for those ages 25 – 54 years.  The Employment-Population Ratio is the Civilian Employed divided by the Civilian Noninstitutional Population.  Among disconcerting aspects of this measure is the long-term (most notably the post-2000) trend, especially given this demographic segment.

The current value as of the May 4, 2018 update (reflecting data through the April employment report) is 79.2%:

Employment Population Ratio: 25 - 54 years

Data Source:  U.S. Bureau of Labor Statistics, Employment Population Ratio: 25 – 54 years [LNS12300060], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed May 11, 2018:

https://fred.stlouisfed.org/series/LNS12300060

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U.S. Auto Sales

U.S. auto sales have experienced significant growth over the post-2009 period as seen in the chart shown below. The current reading (through April) is 17.069 million vehicles SAAR.  Of great economic importance is whether auto sales have peaked, which I believe has occurred, as well as other characteristics of the light vehicle market.  A long-term chart is shown below:

Light Weight Vehicle Sales: Autos and Light Trucks

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 May 9, 2018:

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

Here is the same measure on a “Percent Change From Year Ago” measure, with a current reading of .6% .  As one can see growth has been intermittent in nature since early 2016:

U.S. Light Vehicle Sales Percent Change From Year Ago

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Domestic Auto Production

Another notable measure is that of “Domestic Auto Production,” defined in FRED as:

Domestic auto production is defined as all autos assembled in the U.S.

Here is “Domestic Auto Production,” depicted below, through March 2018 with a last value of 260.0 thousand, last updated April 30, 2018:

Domestic Auto Production

source:  U.S. Bureau of Economic Analysis, Domestic Auto Production [DAUPSA], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed May 11, 2018:

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

__

Other Indicators

As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2727.72 as this post is written

Charts Indicating Economic Weakness – April 2018

U.S. Economic Indicators

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.  This post is the latest in a series of posts indicating U.S. economic weakness or a notably low growth rate.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.  As seen in the April 2018 Wall Street Journal Economic Forecast Survey the consensus among various economists is for 2.8% GDP growth in 2018.  However,  there are other broad-based economic indicators that seem to imply a weaker growth rate.  There has been a significant lowering of estimates for 1st Quarter GDP growth as seen in the Federal Reserve Bank of Atlanta’s GDP Now (April 16, 2018 estimate of 1.9%) releases.

As well, it should be remembered that GDP figures can be (substantially) revised.

Charts Indicating U.S. Economic Weakness

Below are a small sampling of charts that depict weak growth or contraction, and a brief comment for each:

Rail Freight Carloads

“Rail Freight Carloads” continues to show a downward progression.  Shown below is a chart with data through January (last value of 1,104,080, updated March 21, 2018):

Rail Freight Carloads chart

source:  U.S. Bureau of Transportation Statistics, Rail Freight Carloads [RAILFRTCARLOADSD11], retrieved from FRED, Federal Reserve Bank of St. Louis;  accessed April 11, 2017:

https://fred.stlouisfed.org/series/RAILFRTCARLOADSD11

Here is the same measure on a “Percent Change From Year Ago” basis, with value -2.8%:

Rail Freight Carloads Percent Change From Year Ago

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Auto Sales

Auto sales have experienced significant growth over the post-2009 period. The current reading (through February, updated on March 29) is 16.962 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 11, 2018:

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

Here is the same measure on a “Percent Change From Year Ago” basis, with value -2.1%:

ALTSALES Percent Change From Year Ago

I believe that many factors indicate that auto sales have peaked.  While this peaking will have vast economic implications, there are many other factors concerning auto sales that are worrisome.  While an exhaustive discussion of the topic 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 various aspects of pricing and discounting.

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Total Federal Receipts

“Total Federal Receipts” growth continues to be intermittent in nature since 2015.  As well, the level of growth does not seem congruent to the (recent) levels of economic growth as seen in aggregate measures such as Real GDP.

“Total Federal Receipts” through March had a last value of $210,832 Million.  Shown below is  displayed on a “Percent Change From Year Ago” basis with value -2.7%, last updated April 12, 2018:

Total Federal Receipts Percent Change From Year Ago

source:  U.S. Department of the Treasury. Fiscal Service, Total Federal Receipts [MTSR133FMS], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed April 12, 2018:

https://fred.stlouisfed.org/series/MTSR133FMS

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Commercial And Industrial Loans, All Commercial Banks

“Commercial And Industrial Loans, All Commercial Banks”  through March had a last value of $2138.4559 Billion.  The growth in such loans continues to decline.  Shown below is the measure displayed on a “Percent Change From Year Ago” basis with value 2.6%, last updated April 13, 2018:

Commercial and Industrial Loans, All Commercial Banks Percent Change From Year Ago

source:  Board of Governors of the Federal Reserve System (US), Commercial and Industrial Loans, All Commercial Banks [BUSLOANS], retrieved from FRED, Federal Reserve Bank of St. Louis April 16, 2018:

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

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Inflation Trends

Although there has been widespread recent concern about impending inflation, as well as indications of higher inflation in some price measures, I continue to believe that deflation (as defined by when the CPI goes below zero) will occur.

Current inflation levels and the possibility of deflation 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 it will have critical and wide-ranging economic implications.  As I have stated in past commentaries, my analyses indicate that surveys or “market-based” measures concerning deflation will not provide adequate “advance warning” of this deflation.

For reference, here is the “Core PCE” measure as of the March 29, 2018 update, showing data through February, with a current reading on a “Percent Change From Year Ago” basis of 1.6%:

Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index) YoY

source:  U.S. Bureau of Economic Analysis, Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index) [PCEPILFE], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed April 12, 2018:

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

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Other Indicators

As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2677.84 as this post is written

Charts Indicating Economic Weakness – March 2018

U.S. Economic Indicators

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.  This post is the latest in a series of posts indicating U.S. economic weakness or a notably low growth rate.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.  As seen in the February 2018 Wall Street Journal Economic Forecast Survey the consensus among various economists is for 2.8% GDP growth in 2018.  However,  there are other broad-based economic indicators that seem to imply a weaker growth rate.

As well, it should be remembered that GDP figures can be (substantially) revised.

Charts Indicating U.S. Economic 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:

Employment

I have written extensively concerning unemployment, as the current and future unemployment issue is of tremendous importance yet in many ways is widely misunderstood.

The consensus belief is that employment is robust, with total nonfarm payroll growth and the current unemployment rate of 4.1% being widely cited.  However, my analyses continue to indicate that the conclusion that employment is strong is incorrect.  Of particular note is the unemployment rate, which indicates that unemployment is (very) low.  Closer examination indicates that this metric is, for a number of reasons, highly misleading.

My analyses indicate that the underlying dynamics of the unemployment situation remain exceedingly worrisome, especially with regard to the future.  These dynamics are numerous and complex, and greatly lack recognition and understanding, especially as how from an “all-things-considered” standpoint they will progress in an economic and societal manner.  I have recently written of the current and future U.S. employment situation on the “U.S. Employment Trends” page.

While there are many charts that can be shown, one that depicts a weak long-term growth trend is the “Employment Level: 25 to 54 years, Men” measure.  The current value as of the March 9, 2018 update (reflecting data through the February employment report) is 53.764 million:

LNS12000061

source:  U.S. Bureau of Labor Statistics, Employment Level: 25 to 54 years, Men [LNS12000061], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed March 14, 2018:

https://fred.stlouisfed.org/series/LNS12000061

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Wages And Earnings

The level and growth rates of wages and household earnings continues to be (highly) problematical.  I have extensively discussed these worrisome trends in income and earnings.

As seen in many measures, including that seen below, the problem is chronic (i.e long-term) in nature.  Shown below is the “Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over” measure.  The current value as of the January 17, 2018 update (reflecting data through the fourth quarter of 2017) is $345:

LES1252881600Q

source:   U.S. Bureau of Labor Statistics, Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over [LES1252881600Q], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed March 14, 2018:

https://fred.stlouisfed.org/series/LES1252881600Q

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Total Federal Receipts

“Total Federal Receipts” growth continues to be intermittent in nature since 2015.  As well, it does not seem to confirm the (recent) levels of economic growth as seen in aggregate measures such as Real GDP.

“Total Federal Receipts” through February had a last value of $155,623 Million.  Shown below is  displayed on a “Percent Change From Year Ago” basis with value -9.4%, last updated March 12, 2018:

Total Federal Receipts

source:  U.S. Department of the Treasury. Fiscal Service, Total Federal Receipts [MTSR133FMS], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed March 14, 2018:

https://fred.stlouisfed.org/series/MTSR133FMS

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Domestic Auto Production

Another notable measure is that of “Domestic Auto Production,” defined in FRED as:

Domestic auto production is defined as all autos assembled in the U.S.

Here is “Domestic Auto Production,” depicted below, through January 2018 with a last value of 233.5 thousand, last updated March 2, 2018:

Domestic Auto Production

source:  U.S. Bureau of Economic Analysis, Domestic Auto Production [DAUPSA], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed March 14, 2018:

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

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Alternate Growth Trend Measures

Another facet of economic activity is seen in the ratio of the  Conference Board’s Coincident Composite Index to the Lagging Composite Index.  I interpret the trends seen in this measure to be disconcerting, as the ratio has generally been sinking for years:

Conference Board Coincident to Lagging Ratio

source:  Haver’s February 22, 2018 post (“U.S. Leading Economic Indicators Surge“)

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Other Indicators

As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2749.48 as this post is written

Charts Indicating Economic Weakness – February 2018

U.S. Economic Indicators

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.  This post is the latest in a series of posts indicating U.S. economic weakness or a notably low growth rate.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.  The Gross Domestic Product Q4 2017 Advance Estimate (pdf) of January 26, 2018 was 2.6%, and as seen in the February 2018 Wall Street Journal Economic Forecast Survey the consensus among various economists is for 2.8% GDP growth in 2018.  However, there are other broad-based economic indicators that seem to imply a weaker growth rate.  As well, it should be remembered that GDP figures can be (substantially) revised.

Charts Indicating U.S. Economic 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:

Total Private Construction Spending

Various measures of construction continue to show weak growth and/or contraction.

“Total Private Construction Spending” through December had a last value of $963,247 Million.  Shown below is the measure displayed on a “Percent Change From Year Ago” basis with value 2.1%, last updated February 1, 2018:

TLPRVCONS Percent Change From Year Ago

source:  U.S. Bureau of the Census, Total Private Construction Spending [TLPRVCONS], retrieved from FRED, Federal Reserve Bank of St. Louis accessed February 9, 2018:

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

Total Federal Receipts

“Total Federal Receipts” growth continues to be intermittent in nature since 2015.

“Total Federal Receipts” through January had a last value of $361,038 Million.  Shown below is  displayed on a “Percent Change From Year Ago” basis with value 4.9%, last updated February 12, 2018:

Monthly Total Federal Receipts

source:  U.S. Department of the Treasury. Fiscal Service, Total Federal Receipts [MTSR133FMS], retrieved from FRED, Federal Reserve Bank of St. Louis February 12, 2018:

https://fred.stlouisfed.org/series/MTSR133FMS

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Commercial And Industrial Loans, All Commercial Banks

“Commercial And Industrial Loans, All Commercial Banks” through January had a last value of $2126.943 Billion.  Shown below is the measure displayed on a “Percent Change From Year Ago” basis with value 1.2%, last updated February 9, 2018:

BUSLOANS_2-9-18 Percent Change From Year Ago

source:  Board of Governors of the Federal Reserve System (US), Commercial and Industrial Loans, All Commercial Banks [BUSLOANS], retrieved from FRED, Federal Reserve Bank of St. Louis February 9, 2018:

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

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Employment

I have written extensively concerning unemployment, as the current and future unemployment issue is of tremendous importance.

The consensus belief is that employment is robust, citing total nonfarm payroll growth and the current unemployment rate of 4.1%.  However, my analyses continue to indicate that the conclusion that employment is strong is incorrect.  Of particular note is the unemployment rate, which indicates that unemployment is (very) low.  Closer examination indicates that this metric is, for a number of reasons, highly misleading.

My analyses indicate that the underlying dynamics of the unemployment situation remain exceedingly worrisome, especially with regard to the future.  These dynamics are numerous and complex, and greatly lack recognition and understanding, especially as how from an “all-things-considered” standpoint they will progress in an economic and societal manner.  I have recently written of the current and future U.S. employment situation on the “U.S. Employment Trends” page.

While there are many charts that can be shown, one that depicts a worrisome trend is the Civilian Labor Force Participation Rate for those with Bachelor’s Degrees and Higher, Ages 25 and Above.  The current value as of the February 2, 2018 update (reflecting data through the January employment report) is 73.4%:

LNS11327662

source:  U.S. Bureau of Labor Statistics, Civilian Labor Force Participation Rate: Bachelor’s Degree and Higher, 25 years and over [LNS11327662], retrieved from FRED, Federal Reserve Bank of St. Louis, February 9, 2018:

https://fred.stlouisfed.org/series/LNS11327662

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Productivity Measures

While I have expressed concerns about the overall definitions and value of productivity measures in the past, I do find the current-era trends to be disconcerting.

One such chart that shows a subdued level of a productivity measure is that of “Manufacturing, Real Output Per Hour.” Through the fourth quarter the last value was 109.101.  Shown below is the measure displayed on a “Percent Change From Year Ago” basis with value 1.1%, last updated February 1, 2018:

OPHMFG Percent Change From Year Ago

source:  U.S. Bureau of Labor Statistics, Manufacturing Sector: Real Output Per Hour of All Persons [OPHMFG], retrieved from FRED, Federal Reserve Bank of St. Louis February 12, 2018:

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

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Other Indicators

As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2656.00 as this post is written

Charts Indicating Economic Weakness – December 2017

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.  This post is the latest in a series of posts indicating U.S. economic weakness or a low growth rate.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.  The Gross Domestic Product Q3 2017 Second Estimate (pdf) of November 29, 2017 was 3.1%, and as seen in the November 2017 Wall Street Journal Economic Forecast Survey the consensus among various economists is for 2.5% GDP growth in 2017 & 2018.  However, there are other broad-based economic indicators that seem to imply a weaker growth rate.  As well, it should be remembered that GDP figures can be (substantially) revised.

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

Total Private Construction Spending

Various measures of construction continue to show weak growth and/or contraction.

Shown below is “Total Private Construction Spending,” through October with last value of $949,946 Million, displayed on a “Percent Change From Year Ago” basis with value 3.2%, last updated December 1, 2017:

Total Private Construction Spending

source:  U.S. Bureau of the Census, Total Private Construction Spending [TLPRVCONS], retrieved from FRED, Federal Reserve Bank of St. Louis accessed December 6, 2017:

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

Total Federal Receipts

“Total Federal Receipts” growth continues to be intermittent in nature.

Shown below is “Total Federal Receipts,” through October with last value of $235,341 Million, displayed on a “Percent Change From Year Ago” basis with value 6.2%, last updated November 13, 2017:

Total Federal Receipts Percent Change From Year Ago

source:  U.S. Department of the Treasury. Fiscal Service, Total Federal Receipts [MTSR133FMS], retrieved from FRED, Federal Reserve Bank of St. Louis December 6, 2017:

https://fred.stlouisfed.org/series/MTSR133FMS

Manufacturer’s New Orders – Durable Goods

Shown below is “Manufacturer’s New Orders -Durable Goods,” through October with last value of $237,375 Million, displayed on a “Percent Change From Year Ago” basis with value 1.6%, last updated December 4, 2017:

Durable Goods New Orders Percent Change From Year Ago

source:  U.S. Bureau of the Census, Manufacturers’ New Orders: Durable Goods [DGORDER], retrieved from FRED, Federal Reserve Bank of St. Louis December 6, 2017:

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

Commercial And Industrial Loans, All Commercial Banks

Shown below is “Commercial And Industrial Loans, All Commercial Banks” through October with last value of $2,122.6193 Billion, displayed on a “Percent Change From Year Ago” basis with value of 1.2%, last updated December 1, 2017:

Commercial And Industrial Loans Percent Change From Year Ago

source:  Board of Governors of the Federal Reserve System (US), Commercial and Industrial Loans, All Commercial Banks [BUSLOANS], retrieved from FRED, Federal Reserve Bank of St. Louis December 6, 2017:

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

The Yield Curve

Many people believe that the Yield Curve is a leading economic indicator for the United States economy.

On March 1, 2010, I wrote a post on the issue, titled “The Yield Curve As A Leading Economic Indicator.”

While I continue to have the above-stated reservations regarding the “yield curve” as an indicator, I do believe that it should be monitored.

Below is a yield-curve proxy chart showing the spread between the 10-Year Treasury and 2-Year Treasury using constant maturity securities.  This daily chart is from June 1, 1976 through December 7, 2017, with recessionary periods shown in gray. This chart shows a value of .57%:

T10Y2Y_12-8-17

source:  Federal Reserve Bank of St. Louis, 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity [T10Y2Y], retrieved from FRED, Federal Reserve Bank of St. Louis December 10, 2017:

https://research.stlouisfed.org/fred2/series/T10Y2Y

Population Growth

Shown below is a long-term chart of population growth on a “Percent Change From A Year Ago” basis with value .7%.  The declining nature of the growth rate is notable and may in itself may deserve consideration as an economic indicator:

Total Population Percent Change From Year Ago

source:  U.S. Bureau of the Census, Total Population: All Ages including Armed Forces Overseas [POP], retrieved from FRED, Federal Reserve Bank of St. Louis December 10, 2017:

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

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2659.99 as this post is written

Charts Indicating Economic Weakness – November 2017

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.

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

Overall Economic Activity

While the Gross Domestic Product Q3 2017 Advance Estimate (pdf) of October 27, 2017 was 3.0%, and as seen in the November 2017 Wall Street Journal Economic Forecast Survey the consensus among various economists is for 2.5% GDP growth in 2017 & 2018, there are other broad-based economic indicators that seem to imply a weaker growth rate.  As well, it should be remembered that GDP figures can be (substantially) revised.

Among the broad-based economic indicators that have been implying weaker growth or mild contraction is the Chicago Fed National Activity Index (CFNAI).

The Chicago Fed National Activity Index (CFNAI) updated as of October 23, 2017:

The CFNAI, with the October 23, 2017 reading of .17:

CFNAI 10-23-17 .17

source:  Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis, November 16, 2017;

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

An ancillary measure of the Chicago Fed National Activity Index (CFNAI) – the Chicago Fed National Activity Diffusion Index (CFNAIDIFF) – updated as of October 23, 2017:

The CFNAIDIFF, with current reading of -.19:

CFNAIDIFF 10-23-17 -.19

source:  Federal Reserve Bank of Chicago, Chicago Fed National Activity Index:  Diffusion Index [CFNAIDIFF], retrieved from FRED, Federal Reserve Bank of St. Louis, November 16, 2017;

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

Rail Freight Carloads

Another notable measure is that of “Rail Freight Carloads,” as depicted below, through September with last value of 1,086,482, last updated November 16, 2017:

Rail Freight Carloads

source:  U.S. Bureau of Transportation Statistics, Rail Freight Carloads [RAILFRTCARLOADSD11], retrieved from FRED, Federal Reserve Bank of St. Louis;  November 16, 2017:

https://fred.stlouisfed.org/series/RAILFRTCARLOADSD11

Here is the same measure on a “Percent Change From Year Ago” basis:

Rail Freight Carloads Percent Change From Year Ago

The Yield Curve

Many people believe that the Yield Curve is a leading economic indicator for the United States economy.

On March 1, 2010, I wrote a post on the issue, titled “The Yield Curve As A Leading Economic Indicator.”

While I continue to have the above-stated reservations regarding the “yield curve” as an indicator, I do believe that it should be monitored.

As an indication of the yield curve (i.e. a yield curve proxy), below is a weekly chart from January 1, 1990 through November 17, 2017.  The top two plots show the 10-Year Treasury and 2-Year Treasury yields.  The third plot shows the (yield) spread between the 10-Year Treasury and 2-Year Treasury, with the November 17, 2017 closing value of .62%.  The bottom plot shows the S&P500:

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

U.S. Yield Curve proxy

Domestic Auto Production

Another notable measure is that of “Domestic Auto Production,” defined in FRED as:

Domestic auto production is defined as all autos assembled in the U.S.

Here is “Domestic Auto Production,” depicted below on a “Percent Change From Year Ago” basis, through September with last value of -34.2 Percent, last updated October 30, 2017:

U.S. Domestic Auto Production Percent Change From Year Ago

source:  U.S. Bureau of Economic Analysis, Domestic Auto Production [DAUPSA], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed November 15, 2017:

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

Inflation/Deflation Trends

Current inflation levels and the possibility of deflation  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 prolonged and deep U.S. deflationary conditions are on the horizon, and that such deflationary conditions will cause, as well as accompany, inordinate economic hardship. [note: to clarify, for purposes of this discussion, when I mention “deflation” I am referring to the CPI going below zero. Also, I have been using the term “deflationary pressures” as a term to describe deflationary manifestations within an environment that is still overall inflationary but heading towards deflation.]

My latest commentary regarding deflationary pressures and future deflation can be found in the October 2 post titled “Charts Indicating Economic Weakness – October 2017.”

Other Indicators

As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2578.85 as this post is written

Charts Indicating Economic Weakness – October 2017

Throughout this site there are many discussions of economic indicators.  At this time, the readings of various indicators are especially notable.

While many U.S. economic indicators – including GDP – are indicating economic growth, others depict (or imply) various degrees of weak growth or economic contraction.

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

Overall Economic Activity

While the recently-released 2nd quarter GDP (Third Estimate)(pdf) was 3.1%, there are other broad-based economic indicators that seem to imply a weaker growth rate.  As well, it should be remembered that GDP figures can be (substantially) revised.

Currently, the consensus opinion for near-term growth is that the recent hurricanes will serve to depress economic growth.  As Janet Yellen stated at the September 20 FOMC Press Conference:

In the third quarter, however, economic growth will be held down by the severe disruptions caused by Hurricanes Harvey, Irma, and Maria.  As activity resumes and rebuilding gets underway, growth likely will bounce back.  Based on past experience, these effects are unlikely to materially alter the course of the national economy beyond the next couple of quarters.

There has been a (very) significant lowering of estimates for 3rd Quarter GDP growth.  This can be seen in various estimates, including the Federal Reserve Bank of Atlanta’s GDP Now (September 29 estimate of 2.3%) as well as the Federal Reserve Bank of New York’s Nowcast (September 29 estimate of 1.5%.)

However, is the recent reduction in economic growth estimates indeed due to the hurricanes?  There are many reasons to believe that overall weakening economic growth and/or contraction in some economic measures had been occurring previous to the hurricanes.

Among the broad-based economic indicators that have been implying weaker growth or mild contraction is the Chicago Fed National Activity Index (CFNAI) and the Aruoba-Diebold-Scotti Business Conditions Index (ADS Index).

As seen in the charts shown below, such trends have been in existence for a number of months:

The September 2017 Chicago Fed National Activity Index (CFNAI) updated as of September 25, 2017:

The CFNAI, with current reading of -.31:

CFNAI_9-25-17 -.31

source:  Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis, September 25, 2017;

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

The ADS Index, from the year 2000 through September 16, 2017:

 

ADS Index

Inflation Trends

Current inflation levels and the possibility of deflation  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 prolonged and deep U.S. deflationary conditions are on the horizon, and that such deflationary conditions will cause, as well as accompany, inordinate economic hardship. [note: to clarify, for purposes of this discussion, when I mention “deflation” I am referring to the CPI going below zero. Also, I have been using the term “deflationary pressures” as a term to describe deflationary manifestations within an environment that is still overall inflationary but heading towards deflation.]

Of note, the shortfall between the Federal Reserve’s stated inflation target (2% on the (Core) PCE Price Index) and the actual inflation reading continues.  For years there has been a continued inability for the 2% inflation target to be sustained.

Below is a chart of the “Core PCE” price measure as of the September 29, 2017 update, showing data through August, with a current reading of 1.3%:

PCEPILFE_9-29-17 1.3 Percent Change From Year Ago

source:  U.S. Bureau of Economic Analysis, Personal Consumption Expenditures Excluding Food and Energy (Chain-Type Price Index) [PCEPILFE], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 1, 2017:

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

While there appears (as seen in forecasts and surveys) to be little if any general concern about deflation, recent commentary, including that from Janet Yellen in the September 20 FOMC Press Conference and in the September 26 speech concerning inflation is notable.  A couple of excerpts from the September 26 speech titled “Inflation, Uncertainty, And Monetary Policy” (pdf):

As I will discuss, this low inflation likely reflects factors whose influence should fade over time.  But as I will also discuss, many uncertainties attend this assessment, and downward pressures on inflation could prove to be unexpectedly persistent.  My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation.

also:

Based on analyses of this sort, my colleagues and I currently think that this year’s low inflation is probably temporary, so we continue to anticipate that inflation is likely to stabilize around 2 percent over the next few years.  But our understanding of the forces driving inflation is imperfect, and we recognize that something more persistent may be responsible for the current undershooting of our longer-run objective.  Accordingly, we will monitor incoming data closely and stand ready to modify our views based on what we learn.

Although we judge that inflation will most likely stabilize around 2 percent over the next few years, the odds that it could turn out to be noticeably different are considerable.

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, including overall retail sales.  This weakness (including the implications stemming from the substantial number of retail store closures) has widespread consequences for the U.S. economy as discussed in previous posts, including the June 13, 2011 post titled “The Changing Nature Of Retail – Economic Implications.”

While I continue to believe that the various retail sales figures are overstated, one tangential long-term indicator that is notable in its current trend is that of “All Employees:  Retail Trade” as depicted below on a “Percent Change From Year Ago” basis, through August with last value of -.2 Percent, last updated September 1, 2017:

All Employees: Retail Trade percent change from year ago

source:  U.S. Bureau of Labor Statistics, All Employees: Retail Trade [USTRADE], retrieved from FRED, Federal Reserve Bank of St. Louis; September 29, 2017:

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

Another worrisome aspect is the peaking in auto sales and the (current-era) dynamics and structure of the auto industry with the accompanying widespread economic implications.

Rail Freight Carloads

Another notable measure is that of “Rail Freight Carloads,” as depicted below, through July with last value of 1,099,399, last updated September 15, 2017:

U.S. Rail Freight Carloads

source:  U.S. Bureau of Transportation Statistics, Rail Freight Carloads [RAILFRTCARLOADSD11], retrieved from FRED, Federal Reserve Bank of St. Louis;  September 29, 2017:

https://fred.stlouisfed.org/series/RAILFRTCARLOADSD11

Here is the same measure on a “Percent Change From Year Ago” basis:

U.S. Rail Freight Carloads Percent Change From Year Ago

Other Indicators

As mentioned previously, many other indicators discussed on this site indicate economic weakness or economic contraction, if not outright (gravely) problematical economic conditions.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2519.36 as this post is written