US Economy

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Chart of the Day: US deleveraging

Today’s chart comes from Calculated Risk and calculates the Mortgage Equity Withdrawal (MEW), as a percentage of disposable income. This is derived from the Fed Flow of Funds Data, as explained: This is an aggregate number, and is a combination of homeowners extracting equity (hence the name “MEW”, but there is little MEW right now!),

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Full FOMC Statement

Last night the Fed left things pretty much unchanged which, for some unknown reason, upset equities. What did they want, a party trick? Here’s the full statement: Release Date: December 13, 2011 For immediate release Information received since the Federal Open Market Committee met in November suggests that the economy has been expanding moderately, notwithstanding

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Chart of the Day: US deflation held back

Today’s chart comes from Econompic and tracks how in the United States, public sector spending has offset private sector deleveraging in Q3 of 2011: There are two takeaways here. First, whilst the US private sector is outright deleveraging, this has only just begun and it still at hugely elevated levels (except college students who are

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Chart of the Day: US male unemployment

Today’s chart comes from Colin Twigg’s blog, and graphs the US male unemployment rate from 1975 to now: Given that the headline total unemployment rate fell to 8.6%, this chart gives a more realistic view of both the structural and cyclical rate, and to minimise demographic factors, as Colin says: There is a visible improvement,

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Can the US economy decouple?

Last night’s Wall St trade took heart from a big jump in the Conference Board consumer confidence figures. It is great that the US has weathered its QE2 withdrawal and deficit ceiling debacle, but we should bear in mind that the index only rose to July levels, which are still very suppressed: Despite this,  yesterday the

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Fitch puts US on negative watch

You really have to laugh, in a black kind of way, at the role of the ratings agencies today. It’s not that I blame them now. They are doing their jobs again. But the failure to do so previously makes them look like playthings of the milieu now. Anyways, Fitch just put the US on

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A picture of deleveraging

Overnight, the New York Fed released its quarterly report into US credit trends. To cut a long story short, US consumers continue to deleverage. The research has some killer charts, including the one above, which shows that after all of the fear and loathing of the past three years, aggregate credit has slid back only

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When supercommittees fail

Check out this great chart from Abnormal Returns this morning: It says all sorts of wonderful things, including that it’s much more difficult to make successful bearish forecasts than it is a successful bullish ones.  But the point I wish to make this morning is about the big bounce in positive economic surprises since August

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Can the US consumer carry us all?

The US consumer is back, defying the odds and me. Last night we had October retail sales and results were good. From Calculated Risk: On a monthly basis, retail sales were up 0.5% from September to October (seasonally adjusted, after revisions), and sales were up 7.9% from October 2010. From the Census Bureau report: The U.S.

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Fed slashes projections

For those living under a rock, last night was the Fed meeting for October and the results are below. First, the Statement: Information received since the Federal Open Market Committee met in September indicates that economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of the temporary factors that had weighed

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Chart of the Day: US earnings revision

A great chart from Dr Ed Yardeni’s blog on the US S&P500 earnings bonanza (note that the US reports quarterly, Australian corporates half yearly). The chart is a weekly update of analyst’s average forecast of quarterly earnings. Note the substantial upward revisions to Q1 thru Q3, with an estimated looking through growth rate of some

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Hope from the US?

Last night’s market action may have been worrisome for China (with metals crushed) and frustrating for Europe (going nowhere fast) but US data was excellent. The Philly Fed Index, a guide to manufacturing in the north east, and the same Philly Fed that collapsed in August, rebounded at a record pace, blowing away all market

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FOMC statement

Information received since the Federal Open Market Committee met in August indicates that economic growth remains slow. Recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has been increasing at only a modest pace in recent months despite some recovery in sales of motor vehicles

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US recession data marches on

Last night’s US data was not reassuring. The two North Eastern Fed manufacturing indices both missed market expectations. The Empire State Index fell further, prices rose and employment dropped, a nasty combination: The Empire State Manufacturing Survey indicates that conditions for New York manufacturers worsened for a fourth consecutive month in September. The general business conditions index

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More signs of US slowing

I’ve been arguing for some months that the US economy is slowing. More recently I added the narrative that at the zero bound for monetary policy, where the core price signal ceases to have meaning, it is the expectation of price intentions in the economic leaders themselves that becomes the primary signal. In short, it

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What does Obama’s plan achieve?

Courtesy of Zero Hedge comes this take on the impact of the Obama jobs plan, the operative words being “how congressional Republicans will respond to the proposal”: BOTTOM LINE: The President’s proposal is larger than expected, with spending proposals and tax cuts both somewhat greater than expected. This proposal does not imply a significant shift

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Obama’s 11th Hour

Find below the full text of US President Barack Obama’s speech: Mr. Speaker, Mr. Vice President, Members of Congress, and fellow Americans: Tonight we meet at an urgent time for our country. We continue to face an economic crisis that has left millions of our neighbors jobless, and a political crisis that has made things

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The powerless Fed

Markets sold off last night on the concern that Fed is not going to man the big QE3 pump. With good reason it seems, though there is still hope. We know that the dominant clique at the FOMC is concerned about inflation. However, in his speech overnight, Ben Bernanke made it clear, rightly, that the

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The Chairman’s speech

Find below the full text of Chairman Bernanke’s overnight speech: Chairman Ben S. Bernanke At the Economic Club of Minnesota Luncheon, Minneapolis, Minnesota September 8, 2011 The U.S. Economic Outlook Good afternoon. I am delighted to be in the Twin Cities and would like to thank the Economic Club of Minnesota for inviting me to

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Gooooooo GOP!

I would like to able to report this morning that US economic leadership has reached a rapprochement. That both Treasury and the Federal Reserve have agreed a new round of stimulus measures that aim specifically to create US jobs and reverse the decline of its middle class through a sensible balance of medium term spending,

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Pulling a rabbit out of a hat

Last night several more Fed boffins were on the hustings giving dovish speeches. The first is Dennis Lockhart. Here is the executive summary: While acknowledging that downside risks to the recovery have increased, Lockhart expects a modest cyclical recovery to proceed. In his view, a number of necessary structural adjustments are holding back economic growth in

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US GDP signalling big job losses

Last night,  Zero Hedge ran an interesting post looking at the long term relationship between US GDP and employment growth. I have reproduced one chart and added a few of my own. The results are sobering. First, the history of US GDP: That gives some idea of just how sub-par this US recovery has been in

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Pivotal week for markets

As the US economy flirts with recession, the week ahead is huge as August data pours in. This could be make or break for markets. Following is a great summary from Calculated Risk with much more available at the site. —– Monday, Aug 29th —– 8:30 AM: Personal Income and Outlays for July. The following graph shows

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US recession a certainty

From the excellent analysts at Forecast comes this note from yesterday: US recession a certainty on asset based probability model * Probability model currently arguing that a recession is a near certainty within next year * Backs up signals from the more coincident consumer confidence gauge * Argues for more ‘distribution’ as risk is unloaded

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Is the US already in recession?

Following my earlier discussion on the different impacts different kinds of shocks, from the eminently sensible team at Forecast comes this analysis of the implications of the recently recorded collapse in US consumer confidence. Enjoy. M/T: Confidence shocks – why the US may already be in recession * Michigan confidence plunge is a red alert

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Full FOMC Statement

Below find the full FOMC Statement. And below that, find a useful guide to the changed language from Zero Hedge. Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected.  Indicators suggest a deterioration in overall labor