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Unemployment Claims Down Slightly
Department of Labor data show that weekly jobless claims fell by 6,000 last week to a level of 388,000. These data are notoriously volatile so the four-week moving average is a more reliable number and was up 3,250 to 394,250. Analysis: Both of the above figures are well within the realm of a statistical error and future revisions to the data may swing 180 degrees from these results. Embedded in that story though is the fact that jobless claims are holding steady and to such a degree that it is hard to tell which direction they are...
read moreU.S. Created 201,000 Jobs in March
According to massive payroll firm, ADP, the U.S. economy created 201,000 jobs in March. Analysis: Really there isn’t much to say here other than that this big job add figure is very welcome. Even in a month where the public’s focus was on crises in the Middle East and Japan, businesses continued to make analytical decisions, such as hiring people to do necessary work. Increases in gross domestic product (GDP) are finally starting to lead to new hires – a very good thing. A reduction in the unemployment rate cannot...
read moreJob Losses Down Tremendously
Independent survey firm, Challenger, Gray & Christmas (CGC) of Chicago, announced that planned firings are down 39% from March of last year. This percentage figure represents translates into planned job losses of 41,528. Additionally, compared to just last month, planned firings are down 18%. Analysis: Data from many sources are now demonstrating that job losses are down tremendously. The figure from CGC does not include jobs created, just job losses that are planned. Government workers around the country are losing their jobs...
read moreConsumer Confidence Falling Is No Big Deal
This morning the Conference Board reported that March consumer confidence fell to 63.4 from February’s (revised upward) level of 72.0. Analysis: This result had to be expected given the uncertainty generated by the crises in both the Middle East and Japan, as well as the resulting increase in prices of consumer goods, especially gas. However, the good news is that March’s 63.4 reading is the same as it was three months ago. Now that folks are starting to gain comfort with what has happened and is happening in the Middle...
read moreConsumer Spending and Incomes Rise
This morning the U.S. Department of Commerce announced February’s consumer spending and income numbers. Spending was up 0.7% versus an expectation by economists of up by 0.6%. Similarly, income was up 0.3% compared to the 0.4% up that economists had predicted. Lastly, the savings rate declined slightly to 5.8%. Analysis: The consumer spending number is powerful evidence of growing consumer confidence. Even though a quick survey of U.S. consumers showed a decline in confidence in February, consumers continued to spend despite...
read moreGovernment Support of Economy Fading
During the onset of the Great Recession the Federal Government, along with the Federal Reserve, stepped into the U.S. economy to shore up its failing foundations. Now the end of that artificial support is being curtailed. I consider this to be a very good thing because, in my opinion, the Federal Reserve in particular has too much stimulus in the economy. ‘Too much stimulus’ is another way of saying that there is too much money in the economy chasing too few goods. That is a prescription for inflation. Frankly, again in my...
read moreMiddle East Unrest Update
Back in February I published an intuitive assessment of the Middle East unrest that has been a fairly accurate rendition of the events that have unfolded throughout the troubled region. As effective as intuition is at providing insight into moments where facts are not forthcoming, or absent altogether, it is just a snapshot of a moment in time. So intuitive assessments have to be updated and they must incorporate new facts as they appear. Here is a factual run down of what is happening in some of the Middle Easts hotter spots, my...
read moreEscalating Tension Between Palestinians and Israel
While the Middle East has been embroiled in foment and near-revolution since January the usual suspects of regional tension, the Palestinians and Israel, have been very quiet. Not so anymore. From the outside looking into the situation between these long-time rivals it looks as if the Palestinians are trying to provoke Israel into retaliation. Such an action would send the entire region into chaos as it would inflame and embolden the Muslim street. Here is a list of the major Palestinian provocations over the last several weeks: 11 March:...
read moreEurope is a Continent, Not a Body Politic
News over the last week coupled with European handling of its debt crisis last year has highlighted that Europe is merely a continent, and not a body politic. The EU was created by the French in the 1960s to be a countervailing weight to the heft of the United States. It rested on the assumption that all of the nations of Europe would rally around the same existential need that the French felt. History, however, has demonstrated that when there is real crisis in the EU that each of the nations follows their own self-interest. Take for...
read moreInvestors Should Use Analogies With Caution
One of the common ways that investors make sense of events charged with chaos, such as the 2011 Middle Eastern crisis and Japanese crisis, is through analogy. We compare a current event to a past event where we feel that we have a good grasp of the facts that served as causes for that past event. The problem with this kind of thinking is that we will only understand current chaotic events to the extent that they are similar to past events. We are in trouble as soon as the new chaotic event throws details at us that fall outside of the...
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