Swimming Upstream

THE BE YOUR OWN ECONOMIST ® BLOG The Lehmann Letter © President-elect Obama is doing all he can to build confidence that his administration will hit the deck running on January 20, 2009. His economic team is in place and he has made clear that stimulating economic recovery, not deficit reduction or balancing the budget, is his first priority. Good for him. Everyone wishes him well. But the statistical news remains grim. Yesterday the Bureau of Economic Analysis (BEA) confirmed that GDP fell in the third quarter. The announcement also said (http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm): “Profits from current production (corporate profits with inventory Continue reading

A Step In The Right Direction

THE BE YOUR OWN ECONOMIST ® BLOG The Lehmann Letter © Today the Fed announced two initiatives designed to hasten our emergence from the financial crisis (http://www.federalreserve.gov/newsevents/press/monetary/20081125a.htm and http://www.federalreserve.gov/newsevents/press/monetary/20081125b.htm.) In the Fed’s own words: “…the Term Asset-Backed Securities Loan Facility (TALF), (is) a facility that will help market participants meet the credit needs of households and small businesses by supporting the issuance of asset-backed securities (ABS) collateralized by student loans, auto loans, credit card loans, and loans guaranteed by the Small Business Administration (SBA). “Under the TALF, the Federal Reserve Bank of New York (FRBNY) will lend up to $200 Continue reading

The New President’s Dilemma

THE BE YOUR OWN ECONOMIST ® BLOG The Lehmann Letter © The Following Op-Ed ran in The San Francisco Chronicle on November 12 (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/12/EDLJ142NQS.DTL&hw=Michael+Lehmann&sn=001&sc=1000) . It’s still true. President-elect Barack Obama faces a dilemma. A severe recession is unfolding. Demand, production, employment, income – all are falling and falling hard. The new president has two traditional remedies at his disposal: Reduce taxes so that consumers can purchase more, thereby stimulating production and employment, or increase public-works spending to directly boost employment. These remedies will, of course, raise the federal deficit. Therein lies the dilemma: The president cannot effectively deal with Continue reading

What About Homeowners?

THE BE YOUR OWN ECONOMIST ® BLOG The Lehmann Letter © Every day we learn the government bailout has been extended to more businesses or there’s an effort under way to broaden the bailout’s coverage. The banks are gobbling up their share of the $700 billion package. AIG’s assistance has topped $100 billion. The automakers will probably receive a rescue package. American Express has obtained permission to become a bank in order to ease the strains facing its credit-card business. Meanwhile, home prices continue to plunge as foreclosures grow. Millions will lose their homes and millions more will end up Continue reading

Minus 1.2 Million, And Counting

THE BE YOUR OWN ECONOMIST ® BLOG The Lehmann Letter © This morning’s employment report was remarkable (http://stats.bls.gov/news.release/empsit.nr0.htm). It began: “Nonfarm payroll employment fell by 240,000 in October, and the unemployment rate rose from 6.1 to 6.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. October’s drop in payroll employment followed declines of 127,000 in August and 284,000 in September, as revised. Employment has fallen by 1.2 million in the first 10 months of 2008; over half of the decrease has occurred in the past 3 months. In October, job losses continued in manufacturing, Continue reading

The New President’s Dilemma

THE BE YOUR OWN ECONOMIST ® BLOG The Lehmann Letter © President-elect Barack Obama faces a dilemma. A severe recession is unfolding. Demand, production, employment, income – all are falling and falling hard. The new president has two traditional remedies at his disposal: Reduce taxes so that consumers can purchase more, thereby stimulating production and employment, or increase public-works spending to directly boost employment. These remedies will, of course, raise the federal deficit. Therein lies the dilemma: The president can not effectively deal with the recession and shrink the deficit. Which horn of the dilemma should the president choose? Fight Continue reading

10.5

THE BE YOUR OWN ECONOMIST ® BLOG The Lehmann Letter © Everette P. Johnson at the Bureau of Economic Analysis has done a great job over the years maintaining the Bureau’s motor-vehicle-sales data base. The number for the previous month usually appears about the third or fourth of the current month. So there’s little delay. Here’s how to obtain the data. Step 1: Go to http://www.bea.gov/Step 1: Click on “Gross Domestic Product” under “National”Step 2: Scroll down and click on “Motor Vehicles” under “Supplemental Estimates”Step 3: Save to your desktop as an Excel file and then open the fileStep 4: Continue reading

Another Bad Number

THE BE YOUR OWN ECONOMIST ® BLOG The Lehmann Letter © Today the Institute for Supply Management reported its October Purchasing Managers’ Index at 38.9 (http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942). Norbert J. Ore, the Institute’s chair, said: “The PMI indicates a significantly faster rate of decline in manufacturing when comparing October to September. It appears that manufacturing is experiencing significant demand destruction as a result of recent events, with members indicating challenges associated with the financial crisis, interruptions from the Gulf hurricane, and the lagging impact from higher oil prices. This is the lowest level for the PMI since September 1982 when it registered Continue reading

November Publication Schedule & Web Sources

THE BE YOUR OWN ECONOMIST ® BLOG The Lehmann Letter © You can use the WEB SOURCES listing (below) 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 November 2008 Source (* below)…………Series Description…………Day & Date Quarterly Data BLS………………….Productivity………………………….Thu, 6th BEA…………………………GDP……………………………Tue, 25th Monthly Data ISM………………….Purchasing managers’ index……….Mon, 3rd Fed…………………………..Consumer credit……..……….Fri, Continue reading