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Quiet before the storm?
Happy Friday everyone! I have not posted in a week because there really has not been much to comment on in terms of business activity, the economy, or investing. However, today marks a return to posting, mostly because next week kicks off the first quarter earnings season. What can we expect? It’s my feeling that businesses will largely meet the earnings expectations that analysts have for them. There will be some companies that will exceed expectations and some that will not. However, on balance, it’s my feeling that earnings...
read moreUnemployment rate stays the same
The Department of Labor this morning released its payroll figures for the previous month. The data show that the United States added 162,000 jobs in March, the most jobs since three years ago in March. A group of economists had expected the economy to add 200,000 jobs. However, despite 162,000 jobs being added as reported by the DoL, the unemployment rate as reported by the Bureau of Labor Statistics stayed at the same 9.7% in March. While the BLS data is separately gathered, both sources of data are trying to reflect the truth of a...
read moreBest economic news in months
The major auto makers today announced sales results for the month of March (as compared to one year ago) and the data are very encouraging: Nissan…up 43% Toyota…up 41% Ford…up 40% Honda…up 22% GM…up 21% Hyundai…up 15% Some car companies posted drops so the overall rise was tempered slightly, but still strong, up 25% over one year ago. Analysis: Folks, this is the strongest piece of economic data in many months. Yes, GDP was up strongly in the 4th Quarter, but most of that was the result of a one-time...
read moreThe mainstream media is starting to grasp the picture
Today’s WSJ ran a thought piece today entitled, “Jobs Picture Clouded by Long-Term Unemployed” by Gerald F. Seib. The gist of the story is that the unemployment picture is skewed by the number of long-term unemployed, many of whom have stopped looking for work. The article quotes Bureau of Labor Statistics reports of the number of long-term unemployed of around 6 million. This figure is double what it was one year ago. In fact, 40% of the unemployed are in this long-term category – a shocking figure. In short,...
read moreFurther mixed economic data
Today saw the release of other economic data beyond initial jobless claims. Specifically, the U.S. Department of Commerce’s construction spending figures and the Insitute of Supply Management’s manufacturing index. Construction spending in February fell by 1.3%, its fourth consecutive monthly decline. Additionally, January’s data were revised down to 1.4% past the initial estimation of down 0.6%. Both commercial and residential real estate continue to suffer. The ISM’s manufacturing index increased to 59.6 in March...
read moreHow many people are looking for work?
Because the stock markets are closed tomorrow due to Good Friday the initial jobless claims data was reported today by the Department of Labor. Here’s the skinny…initial jobless claims were down by 6,000 to a level of 439,000. Meanwhile, the previous week was revised upward by 3,000 more jobless claims. The four-week moving average which aims to smooth volatility declined by 6,750 to 447,250. This is the lowest level since September 2008. Analysis: There really isn’t much interpretation here. While the jobless claims...
read moreThe investor elephant in the room just put on some weight
Today saw the release of March private payroll data from the nation’s largest processor of payroll checks, ADP. Unemployment “unexpectedly” increased by 23,000 jobs in March vs. an expected 50,000 jobs added by a swath of economists. Analysis: Folks this is not good news. Not only did the economy not add jobs last month, it shed quite a few jobs. Economists are clearly clueless right now as to the reality that your average Joe and Jane are confronting out there as their estimates were off by a shocking 73,000! The...
read moreThe long awaited consumer-spending figures
Hello everyone, Today saw the release of the long-awaited (by me) February consumer-spending figures. The Commerce Department stated that U.S. consumers increased their spending by 0.3% in February. Meanwhile, personal incomes were flat. So what that means is that people must have increased their spending by reducing savings or by increasing their debt. However, on average, people increased their spending by reducing savings as the savings rate fell 0.3% to 3.1%. Lastly, inflation, as measured by the consumer price index, was up 1.3%....
read moreThe sinking of a South Korean naval vessel
Good afternoon folks! Today saw the sinking of a South Korean naval vessel near disputed North/South Korean territorial waters. So far the information is sketchy. However, what is known is that the vessel sank rapidly and that many of its 104 crew members are feared dead. Another South Korean naval vessel is said to have returned fire at an unidentified vessel, but this is so far unconfirmed. If it turns out that North Korea intentionally fired on a South Korean naval ship and sank it, this would be considered an act of war and would be...
read moreThe EU bailout of Greece
Yesterday the EU put the finishing touches on its bailout package for the troubled Greek economy. Key to moving the deal back into the EU court from the IMF court was the involvement of France. The deal is valued at 22 billion Euro and combines monies from both the EU and the IMF. However, the IMF has a secondary role in the aid package. Analysis: While it sounds like Greece is out of the woods, it is not. The 22 billion Euro package can only be awarded to Greece upon condition that it cannot find financing from the international bond...
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