We have written on this blog in the past that the monthly jobs report is very likely the most overrated economic statistic known to man. The labor department tries to estimate the change in the number of employed Americans each month on a base of over 140 million. The margin of error relative to the change in the number of jobs each month is huge. The initial estimate is often wrong and gets revised numerous times. The whole exercise is absurd. And to magnify the stupidity, Wall Street tries to forecast the number and then overreacts to any figure that is better or worse than consensus … [Read more...]
Music Video: Way Back Home
The Fed would do us all a whole lot of good by setting a proper course on interest rate increases. Instead it continues to pander to Wall Street and is five years late to the party. The Fed has clearly lost its “Way Back Home”. A better R&B quintet sound would be hard to find. Cornell Dupree was one of the top three R&B guitarists around. Larry Goldings is a top three Jazz Hammond B3 organ guy. Ronnie Cuber is a top three jazz baritone sax player (Way Back Home needs a baritone sax). Eddie Gomez is a top ten jazz bass player. Finally Steve Gadd seems to be everywhere at once and … [Read more...]
As Goes General Motors, so goes the Nation
As goes General Motors, so goes the nation was a phrase from years ago that spoke to how much impact General Motors business had on the U.S. economy. While GM doesn’t have the same influence that it once did in the U.S. economy, auto sales still play a big role in economic cycles. That is true for the U.S. economy as well as for the global economy. Today, the more appropriate phrase might be as goes Chinese auto sales, so goes the global economy. China is now the world’s largest auto market with annual passenger sales topping 20 million units. China is also the world’s second largest … [Read more...]
Small Business Losing Momentum
According to the NFIB survey of small businesses out yesterday, small business optimism is losing upside momentum. The 3-month moving average of small business optimism turned sharply lower in recent months after peaking in February. Small business optimism is still off of the deeply depressed levels where it languished for much of this “recovery,” but the recent trend does not send an encouraging message. … [Read more...]
No More Excuses for the Fed
The jobs report was released this morning and number of new jobs created in August came in at 173,000, missing estimates by about 44,000 jobs or 0.02% of the total U.S. labor force, but last month’s number was revised up by 30,000 jobs. The unemployment rate fell to 5.1%, which is dead smack in the middle of the Fed’s full employment estimates that were released only two months ago. Wage growth also improved in August, rising 0.3% for the month compared to a 0.2% gain during the prior month. On balance the jobs report had more positives than negatives. There is now nothing in the … [Read more...]
Auto Sales Surge
Is this where all the money saved from low gasoline prices has been going? … [Read more...]
VIDEO: Central Bank Mispricing is Backdrop to Sellof
Great explanation on the folly of misguided monetary activism from Jim Grant. The video is a must watch for those still wondering why the most aggressive Fed policy in the history of the United States has been so ineffective. … [Read more...]
The Monday Melee: Day of Rage
World Dependent on Chinese Growth The Wall Street Journal writes: Beijing’s struggles this summer have spooked many investors into viewing China as a threat to, rather than a rescuer of, global growth. During the financial crisis of 2008 and early 2009, China, with a colossal stimulus plan, acted as a shock absorber. Lately, it is China that is providing the shocks. Over the past week, it has grown clear how dependent a growth-starved world is on China, which accounts for 15% of global output but has contributed up to half of global growth in recent years. Given this dependency, one … [Read more...]
The Monday Melee: The Sharing Economy
Woe betide the Cabbie: New York City taxi pickups have fallen 10% in the first half of the year, and cabbies are pointing the finger straight at Uber and other ride-sharing companies as the cause of their problem. Nolan Hicks and Dan Rivoli write in the New York Daily News: Pickups for the iconic taxis that long ruled Manhattan streets plummeted 10% to 77 million in the first six months of 2015 — down from 85.5 million the year before, a Daily News analysis of trip data showed. Fewer riders for the fleet of 13,587 yellow cabs translated into less cash. The taxis collected $981 million … [Read more...]
Services Sector Booming
The ISM Non-manufacturing report on business shows that the services sector of the economy is booming. In July, the ISM services index hit its highest level since 2005 and its 4th highest level on record. Among the sub-components, business activity, new orders, and employment were all strong. About 80% of U.S. economic output comes from the services sector. … [Read more...]
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