By Spencer; The new data that durable goods orders jumped 4.9% from June to July is a nice indicator that the economy is bottoming and it clearly beat expectations. Yes, a large part of the jump was civilian aircraft orders that tend to be lumpy, but even excluding civilian aircraft orders jumped1.9% month to month.On […]

By Spencer, At month end the S&P 500 PE on trailing operating earnings was around 24. In my model that is expensive, but not massively so. Except in the irrational exuberance market of the 1990s, a PE of over 20 has never been sustained and always signaled a major bear market. Trailing earnings does include […]

hby Spencer On Monday Greg Mankiw quoted a CBO study on health care spending. An Ounce of Prevention …is expensive, says CBO:the evidence suggests that for most preventive services,expanded utilization leads to higher, not lower, medical spending overall. That was the end of his quote from the study. He did not quote the part of […]

By Spencer, Yesterday in describing the employment report I said: Moreover, the manufacturing work week rose from 39.5 to 39.8 hours and overtime hours were 2.9 hours versus 2.8 in the second quarter. Much of this was auto and confirms the other reports that at least auto output is rebounding. I was criticized and accused […]

By Spencer, The employment report was very encouraging. Most importantly, aggregate hours worked were unchanged at 91.1 as compared to 104.1, 101.7 and 99.7 over the last three quarters. An unchanged reading is a massive improvement from the 8% to 9% rate of decline over the past three quarters. With positive productivity this impies that […]

By Spencer, July auto and light truck sales are being reported at 11.2 million annual rate. That is a very significant increase from the second quarter average of 9.5 million and implies that consumption in the third quarter GDP data will be up significantly. I do not have detailed data of how much of this […]

By Spencer: Well at least the stock market seems to like Obama’s economic package. But every day I listen to CNBC analysts and others who seem to believe they did better under Bush’s and want to stick with the policies that generated a 40% stock market decline.

By Spencer, Every month the various economic indicators are released and various people comment on them– usually in isolation. So I thought it would be informative to look at some of the key releases since the December, 2007 peak together. As the chart shows, industrial production and real imports have fallen much more than real […]

The right is having a lot of fun commenting about the economic forecast by the Obama team being too optimistic. I guess they are right, Obama along with everyone else has massively underestimated the damage Team Bush did to our economy.

By Spencer The June employment report sent a clear message to expect more of the same. It showed essentially no signs of improvement as payroll employment fell -467,000 and the unemployment rate rose to 9.5% The average work week — considered a leading indicator of employment growth — dropped to 33.0 hours and the index […]