Category: US Economy
The analysis published under this category are as follows.
Wednesday, June 06, 2007
The More the Fed Delays Cutting US Interest Rates, the More We Cut Our GDP Forecast / Economics / US Economy
By: Paul_L_Kasriel
The Federal Open Market Committee (FOMC), the monetary policy arm of the Federal Reserve, has communicated that it is quite content to hold the federal funds rate at 5-1/4% for an extended period despite four consecutive quarters of sub-par real economic growth and a moderation in core consumer inflation (i.e., excluding food and energy components). Why is the FOMC content to remain on hold? Because it has a forecast calling for enough of a rebound in economic growth later this year to avoid a recession and it desires further moderation in core inflation.Read full article... Read full article...
Wednesday, June 06, 2007
May Retail Sales Looking Soft as Bernanke Appears To Be A Team Player / Economics / US Economy
By: Paul_L_Kasriel
Last week we learned that seasonally-adjusted car and truck sales were down a little from April, which were down a little from March, which were down a little from February, which were down a little from January, which were down a little from December (see Chart 1). Today we learned that seasonally-adjusted chain store sales in May, according to the International Council of Shopping Centers (ICSC) were down 0.7% from April. Nominal gasoline prices may energize nominal May retail sales to be reported next week by the Census Bureau.Read full article... Read full article...
Saturday, June 02, 2007
Real Consumer Spending is the Key to US Recession and Stock Market Sell Off / Economics / US Economy
By: John_Mauldin
Thoughts from the Frontline - In this issue:
Some Discretion in Discretionary Spending, Please
Real Consumer Spending is the Key
The Great Puzzle
Edinburgh, Barcelona, Planes and Trains
Are we on a slippery slope of a recession, or was last quarter's weak GDP a turning point? This week's travel shortened e-letter looks at recent data and re-visits some thoughts on consumer spending from friend Joe Ellis' superb book called Ahead of the Curve. This week I wrote from a rainy Edinburgh, Scotland, although this afternoon was pleasant enough, allowing me to walk around some. But on to important matters.
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Saturday, June 02, 2007
US in Recession and Housing Market Nosediving, What you don't Hear from the Media... / Economics / US Economy
By: Andy_Sutton
... will hurt you
This is not going to come as a big shock to anyone, but it is now rather clear that the media is aiding and abetting the Federal Reserve (and others) in its do-nothing stance with regards to interest rates. Taking a look back throughout history, media complicity is a common occurrence and usually happens when government at some level needs 'cover' to execute a particular policy.
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Friday, June 01, 2007
Will the Real Private Nonfarm Payrolls Please Stand Up? / Economics / US Economy
By: Paul_L_Kasriel
Each month the BLS heroically makes an adjustment to private nonfarm payrolls for the estimated hiring by new businesses not yet included in the BLS survey and the firing by closed-down businesses not captured in the BLS survey. This is called the "birth/death" adjustment. The birth/death adjustment does not take into account cyclical influences on business start-ups and failures.Read full article... Read full article...
Friday, June 01, 2007
When Will All This Bad News on the US Economy Sink In? / Economics / US Economy
By: Peter_Schiff
As a steady stream of bad U.S. economic news accumulates, one wonders when the stock market will finally take notice. After years of highly effective spin coming from Washington and Wall Street, stock investors must re-learn how to recognize bad news, and to stop making lemonade out of every economic lemon that comes their way.Read full article... Read full article...
Thursday, May 31, 2007
The Great American Household Savings Myth / Economics / US Economy
By: Paul_L_Kasriel
In the cover article of the May 28 edition of Barron's (see The Great American Savings Myth ) Gene Epstein, Barron's economics editor, argues that household saving is being underestimated. Epstein's argument centers principally on two issues – the growth in household net worth and the absence of spending on intangibles, such as research and development, from our official Gross Domestic Product (GDP)/saving statistics.
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Tuesday, May 29, 2007
The Four Cylinders of Economic Growth - Part 1 / Economics / US Economy
By: Clif_Droke
Making economic predictions has always been a popular pastime, and never so more than today. We all fancy ourselves armchair economists, and why not, with the stakes higher than ever. Our very livelihoods are to a large extent tied up in the future direction of the economy. With so much at stake now and in the year ahead, the topic of economic growth has never been more relevant.
Yet behind all the economic rhetoric is a question that is seldom asked, namely, what exactly makes our economy tick? Why is it that some countries (notably the U.S.) seem to always have an essentially vibrant economy while others are constantly stuck in neutral...or worse! In short, what are the keys to economic growth? I think you'll agree that they can be distilled into essentially four key principles, which we'll examine here.
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Monday, May 28, 2007
United States Battles Won and Battles Lost / Economics / US Economy
By: Money_and_Markets
Martin Weiss writes: Today is the day I remember my uncle Al, who volunteered for the Battle of the Bulge in World War II, was blown off a transport truck, suffered a lifelong injury, and has since passed away.
But it's also my day to remember my father, Irving Weiss, who fought battles of a less violent kind.
Dad's struggle wasn't against a tangible enemy. Nor did it endanger his life. But its impact on our economy was longer lasting: He fought to safeguard the U.S. dollar. And although he won several battles, ultimately, he lost the war.
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Saturday, May 26, 2007
The Econtarian - Waiting for Godot and Predicted Supply-Side Results / Economics / US Economy
By: Paul_L_Kasriel
If ever there have been federal tax cuts tailored to produce supply-side economic behavior, they were implemented during President George W. Bush's administration starting in 2001. Marginal tax rates on wage/salary income as well as the tax rates on capital income (capital gains and dividend income) both were reduced. In fact, according to data from the Tax Policy Center, the marginal effective tax rates on capital income are the lowest (23%) of any year starting with 1953 (see www.taxpolicycenter.org).Read full article... Read full article...
Thursday, May 24, 2007
Social, Economic and Energy Trends / Economics / US Economy
By: David_Vaughn
Uranium remains the most exciting commodity moving strong on the markets.
Uranium has so far stayed out of the political mainstream so there has not been a coordinated drive to suppress its price. Uranium continues to be influenced by the simple powers of supply and demand. And the demand for uranium is definitely there. Just in the United States alone a new renaissance in nuclear power is dawning. This fact is probably one of the strongest and most powerful of trends as we move deeper into the 21 st century.
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Wednesday, May 23, 2007
US Dollar Bills, Construction Employment And Undocumented Workers / Economics / US Economy
By: Paul_L_Kasriel
Housing is in a relatively deep recession, yet the decline in residential construction employment (not including specialty contractors) has been relatively mild (see Chart 1).Read full article... Read full article...
Tuesday, May 22, 2007
The US Trade Deficit - Cause for Concern? / Economics / US Economy
By: Mike_Hewitt
Can the US trade deficit continue forever? Will there come a time when foreigners will become less likely to hold US denominated assets? Should such a time arrive, the US Federal Reserve will be forced to increase interests rates to prevent a collapse of the US dollar. This would be catastrophic to the US housing market and US economy as a whole.
Imagine an American counterfeiter who uses the fraudulent dollars to purchase Chinese goods. What would you say of such a scenario? Now imagine a US Central Bank that creates money “out of thin air”, places that money into a bank, where upon the bank lends it to an American importer who then uses them to purchase Chinese goods.
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Tuesday, May 22, 2007
US Economy May Wake Up Without Consumers' Prodding? / Economics / US Economy
By: Paul_L_Kasriel
In Mondays Wall Street Journal , reporter Christopher Conkey wrote a piece suggesting that with 75% of the economy faltering, the other 25% was going to accelerate, preventing the 100% from stalling out. Let's start with business investment. Historically, business fixed investment is a lagging indicator.
That is, after residential investment (housing) and consumer spending head for the deck, then business investment follows household spending down. This pattern of business fixed investment spending lagging household spending is shown in Chart 1. On a contemporaneous basis, the correlation between the two series is 0.47. The highest correlation between the series, 0.69, occurs when household spending is advanced (leads) by two quarters.
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Saturday, May 19, 2007
Thoughts from the Frontline - Core Inflation vs. Headline Inflation and Real GDP vs. Nominal / Economics / US Economy
By: John_Mauldin
In this issue:
Are We There Yet?
Core Inflation vs. Headline Inflation
Real vs. Nominal
A Crack in the Consumer Armor?
Ethanol Madness
Los Angeles and Europe
Summer driving season is almost upon us. I remember more than a few long road trips with young kids, who would eventually get bored and tired and lulled into sleep, and with a stop for gas would wake up and ask, "Are we there yet?" or "Where are we?" They would be impatient to get "there" (ok, so was Dad), and the journey was something to be endured rather than enjoyed for its own sake. Today, traveling with the older kids (6 of them 18-30, with just one still at 13) is a lot different, as we look forward to the time together, with great conversation and lots of laughs.
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Friday, May 18, 2007
Henry Paulson Putting Lipstick on a Pig / Economics / US Economy
By: Peter_Schiff
As Treasury Secretary Henry Paulson continues to drum up interest in direct investment in the United States , he will rely on a set of skills that only a long-time Wall Street pro can truly master. It is part of the investment banker's playbook to perform financial makeovers on questionable companies that they are engaged to sell, a process commonly known as "putting lipstick on a pig."Read full article... Read full article...
Friday, May 18, 2007
US Has The Worst Performing Economy / Economics / US Economy
By: Money_and_Markets
I just got back from The Las Vegas Money Show, where I had a fantastic time speaking with subscribers and catching up on all the latest financial trends.
In a second, I'm going to give you a quick summary of what I told everyone at the conference. But first, I want to briefly point out something that happened in the few short days that I was gone …
I'm talking about the fact that the underperformance in commercial real estate shares, which I told you about two weeks ago , is getting worse.
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Thursday, May 17, 2007
Trapped in a Government Spending Spree / Economics / US Economy
By: TheDailyReckoning
The Mogambo Guru writes : "I deftly add the $3.7 trillion in spending by the federal government plus the $1.3 trillion by the state governments, and after a few tries I triumphantly announce that we are looking at a cool $5 trillion or more per year! Wow!"
My excuse is that I was driven insane by the incessant noise from the sensitive Mogambo Economic Seismograph System (MESS), the recording pens noisily clicking and clacking, all the time clicking and clacking, clicking and clacking as they bang back and forth, erratically scrawling and scratching a frantic graph of financial desperation and doom across that rolling strip of graph paper.
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Wednesday, May 16, 2007
Preparing for Weakness in the U.S Economy / Economics / US Economy
By: Money_and_Markets
I'm something of the resident bull here at Weiss Research. While Martin and Mike often take a more pessimistic view of economic events, I generally look on the sunny side. The vigorous discussions we have are great reality checks for the whole team.
As much as I hate to admit it, some of the things Martin and Mike have been talking about, as well as other recent developments, do look downright bearish to me.
The good news is that there are still reasons to be bullish, and plenty of great places to invest. I'll get to that in a moment.
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Monday, May 14, 2007
How the Fed Causes Recessions / Economics / US Economy
By: Gerard_Jackson
It is taken for granted that the US will go into recession on the grounds that the boom-bush cycle is an inherent part of the free market. (Democrats and their lying media mates are fervently praying that the next recession will happen on Bush's watch). Now that Greenspan has retired and Bernanke heads the reserve most commentators expect that it will be business as usual. Unfortunately they are right. Bernanke made that clear a while ago with a supportive comment about the "price rule".
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