Housing permits and starts: still an economic positive – for the moment As you know, I consider housing, and in particular single-family housing permits, one of the very best long leading indicators for the economy. In the past year, however, there has been a unique divergence between housing permits and housing starts, necessitating some adjustments. […]
Industrial production nowcasts that the economy continues to perform well Industrial production increased in February by 0.5%, its highest reading ever with the exception of two months in 2014, and the second half of 2018. Manufacturing production increased 1.2%, also its highest ever with the exception of 24 months from late 2006 through early 2008: […]
On that “deep feeling that something is wrong…” Georg Simmel called it “a faint sense of tension and vague longing” connected with the modern preponderance of means over ends. What Simmel calls estrangement [We] feel as if the whole meaning of our existence were so remote that we are unable to locate it and are […]
Yet another new 50+ year low in continuing jobless claims After 3 days of a data desert, today there is a cornucopia of data: not just initial claims, but housing starts and permits, and industrial production as well. On top of that, a large stretch of the yield curve in the bond market is close […]
Real retail sales for February: not recessionary, but not healthy either Let’s take a look at the February update for one of my favorite indicators, real retail sales. For the past few months, I have suspected that a sharp deceleration beginning with the consumer sector of the economy was more likely than not. At the moment, […]
Real wages for nonsupervisory employees make 19 month low, but no recession signaled Yesterday’s CPI report showed that prices increased 0.8% in February. Meanwhile, the jobs report indicated that average hourly wages for nonsupervisory workers increased 0.3%, so real hourly wages declined -0.5% for the month: As shown in the above graph, real wages had […]
Today’s lesson: never simply project the current trend forward An important reason why I am so insistent on dividing data into long leading, short leading, and coincident indicators is in order to avoid the most common pitfall in any forecasting, which is that of projecting the current trend forward. This morning PPI for February was […]
Another big increase in consumer prices in February, as the yield curve tightens Consumer prices increased 0.8% in January, the fourth time in five months that it has exceeded 0.5%. YoY inflation is now 7.9%, the highest rate since 1982. My favorite measure, CPI ex energy, is also up 6.6% YoY, the worst since the 1981-82 recession […]
JOLTS report for January: the game of employment musical chairs continues The Census Bureau JOLTS report for January, released this morning, indicates that the jobs market continues to be nowhere near equilibrium – which continues to be a good thing for workers’ wages. Several months ago I introduced the idea of a game similar […]
Jobless claims continue to be low, but lows for this expansion likely already past Initial claims (blue) rose 11,000 to 227,000 (vs. the pandemic low of 188,000 on December 4). The 4 week average (red) rose 500 to 231,250 (vs. the pandemic low of 199,750 on December 25). Continuing claims (gold, right scale) increased 18,000 […]