THE BE YOUR OWN ECONOMIST ® BLOG Here’s January’s economic-indicator publication schedule, followed by a list of web sources. Future postings will discuss these indicators. You can use the WEB SOURCES listing to find the data on your own and read the accompanying press release. The addresses take you to the source’s home page and the steps tell you how to navigate the site. That way (rather than provide a direct link to the data) you can become familiar with these sites and find additional information on your own. PUBLICATION SCHEDULE January 2008 Source (* below)…………Series Description…………Day & Date Quarterly Continue reading →

THE BE YOUR OWN ECONOMIST ® BLOG At the height of the late-1990s dot.com boom, New Economy advocates insisted, “This time it’s different,” because (they believed) rising productivity (efficiency) ensured continually rising corporate earnings. Soaring profits guaranteed the stock market would never cease climbing. As long as inflation remained at bay, the engine couldn’t stall. (Because – they thought – only rising inflation brought the higher costs that eroded profit margins.) As we now know, profits stopped rising when full employment boosted wage costs without generating inflation (modest capacity-utilization rates and cheap imports restrained prices). Slumping profits stopped the boom Continue reading →

THE BE YOUR OWN ECONOMIST ® BLOG The blogger will hit the road for three weeks to visit family and friends and will reduce his postings while on the way. Regular postings will resume on January 7, 2008. Happy Holidays! © 2007 Michael B. Lehmann

THE BE YOUR OWN ECONOMIST ® BLOG While this blog remained preoccupied with the December 7 employment report and the December 11 Federal Reserve rate cut, two other statistics were released to little notice. They should have received more attention because they could be bad omens for consumer demand and corporate profits. On December 7 the Fed reported (http://www.federalreserve.gov/releases/g19/Current/) that consumer credit grew $4.7 billion in October. (You can obtain this figure from the press release by subtracting September’s outstanding debt – seasonally adjusted – from October’s.) Multiply that number by 12 to put the data on an annual basis. Continue reading →

THE BE YOUR OWN ECONOMIST ® BLOG The Federal Reserve reduced the federal-funds rate by a quarter-of-a-point today. You can find the Fed’s announcement at http://www.federalreserve.gov/newsevents/press/monetary/20071211a.htm. The text follows: “The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 4-1/4 percent. “Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time. Continue reading →

THE LEHMANN LETTER This morning the Bureau of Labor Statistics (BLS) reported (http://stats.bls.gov/news.release/empsit.nr0.htm ) that nonfarm payroll employment grew by 94,000 in November. Here’s the first paragraph of that report: “Nonfarm payroll employment continued to trend up in November (94,000), andthe unemployment rate held at 4.7 percent, the Bureau of Labor Statistics of theU.S. Department of Labor reported today. Job growth continued in professionaland technical services, health care, and food services. Employment continued todecline in manufacturing and also fell in several housing-related industries,including construction, credit intermediation, and real estate. Average hourlyearnings rose by 8 cents over the month.” Use the Continue reading →

The Lehmann Letter © Sub-Prime Plan This morning’s New York Times ran a story (http://www.nytimes.com/2007/12/06/washington/06debt.html?_r=1&oref=slogin)on the Bush administration’s sub-prime-mortgage bailout plan. It contained an observation and a quote that do not inspire confidence. Any plan must spare borrowers with adjustable-rate mortgages from an imminent reset to a rate higher than the borrowers can afford. The reset is postponed to the day when the borrowers are better able to meet their obligations or home prices rise once again to the point that refinancing become possible. If millions of borrowers are potentially eligible, however, there will be efforts to exclude those who Continue reading →

The Lehmann Letter © Stocks jumped this morning when the Bureau of Labor Statistics (BLS) announced (http://stats.bls.gov/news.release/prod2.nr0.htm) that third-quarter productivity had surged 6.7%. Use that number to update the chart below in your mind’s eye, and you’ll appreciate the impressive size of this gain. There hasn’t been a jump like that in years. Productivity (Click on chart to enlarge) Recessions shaded Productivity measures the economy’s efficiency: How much output grows for each additional hour of labor employed. (Think of miles per gallon [MPG] as an analogy. An efficient engine travels further – and less expensively – on a gallon of Continue reading →

The Lehmann Letter © At the beginning of each month The Wall Street Journal publishes an article on the prior month’s auto sales. Today’s story (http://online.wsj.com/article/SB119643941326509603.html?mod=hpp_us_whats_news) carried an interesting quote: “Auto makers had grown accustomed to industry sales of around 17 million. The industry’s overall seasonally adjusted annual selling pace in November was 16.2 million light vehicles, according to Autodata. “Ford’s production cut reflected a “particularly challenging” market environment, said George Pipas, the auto maker’s top sales analyst, adding that the nation’s economic outlook “contains a high level of uncertainty.” Ford expects 2008 total sales to track as low as Continue reading →

The Lehmann Letter © Here’s December’s economic-indicator publication schedule, followed by a list of web sources. Future postings will discuss these indicators. You can use the WEB SOURCES listing to find the data on your own and read the accompanying press release. The addresses take you to the source’s home page and the steps tell you how to navigate the site. That way (rather than provide a direct link to the data) you can become familiar with these sites and find additional information on your own. (P.S. ISM’s Purchasing Managers’ Index was out today at 50.8 More on that tomorrow,) Continue reading →