July Publication Schedule

The Lehmann Letter © Here’s the publication schedule for some of July 2009’s most important economic indicators. PUBLICATION SCHEDULE July 2009 Source (* below……Series Description……Day & Date Quarterly Data BEA…………………………GDP………………Fri, 31st Monthly Data ISM……….Purchasing managers’ index……….Wed, 1st BLS…………….Employment………… Thu, 2ndFed…………Consumer credit…..(Approximate).Tue, 7thCensu………Balance of trade………………Fri, 10thCensus………Retail trade…………………….Tue, 14thCensus………Inventories……………………..Tue, 14thBLS………….Producer prices……………….Tue, 14thFed………..Industrial production………….Wed, 15thFed……….Capacity utilization…………….Wed, 15thBL………….Consumer prices………………Wed, 15thCensus……..Housing starts………………….Fri, 17thConf Bd…….Leading indicators…………….Mon, 20th NAR…………Existing-home sales…….…….Thu, 23rdCensus……..New-home sales……………….Mon, 27thConf Bd…….Consumer confidence…………Tue, 28th Census…….Capital goods……………….…..Wed, 29th * BEA = Bureau of Economic Analysis of the U.S. Department of Commerce* BLS = Bureau of Labor Statistics of the U.S. Department of Labor* Census = U.S. Continue reading

Barn Sour

The Lehmann Letter © There’s a general consensus that we’ve hit bottom and the economy will now recover. But recovery is not synonymous with rebound, and the key question remains: How swiftly will the economy snap out of recession? Take a look at the consumer-price-index, interest-rate and housing-starts charts before 1990. Notice the strong inverse relationship between interest rates and residential construction. Consumer Prices (Click on chart to enlarge) (Recessions shaded) Federal Funds Rate (Click on chart to enlarge) (Recessions shaded) Housing Starts (Click on chart to enlarge) (Recessions shaded) The Federal Reserve let interest rates fall whenever inflation subsided. Continue reading

The President’s Plan

The Lehmann Letter ® President Obama’s plan to reorganize and modernize our nation’s financial-regulatory system will institute a big improvement over the status quo. Think of these two issues: 1. With proper regulation, would as many homeowners have faced foreclosure? Would they have been cajoled, enticed and just plain encouraged to take on a mortgage-burden they could not afford? Suppose new regulations institutionalize reasonable down payments and other strictures that prevent irresponsible lending and borrowing, can we reduce the likelihood of another disaster? 2. With proper regulation, would financial intermediaries have been able to securitize those mortgages and pedal them Continue reading

Housing Rebound?

The Lehmann Letter ® Today the Census Bureau announced that May housing starts rebounded to 532,000. The chart below reveals that starts remain below all other post-WWII troughs. It’s still too early to declare victory. Housing Starts (Click on chart to enlarge) (Recessions shaded) Moreover, the foreclosure crisis continues unabated. Each month more existing homes are dumped on the market by lenders who have foreclosed on them. New homes, whose construction has just begun, will also add to the total pool of available structures. That does not help resolve the crisis. A construction turnaround would be more welcome if it Continue reading

Consumer Credit

The Lehmann Letter © Earlier this month the Federal Reserve released April data for consumer credit: http://www.federalreserve.gov/releases/g19/Current/ It shrank be $188.4 billion at a seasonally adjusted annual rate. The following chart puts that in perspective. Consumer Credit (Click on chart to enlarge) (Recessions shaded) After years of solid growth averaging over $100 billion per month, consumer credit is now contracting. The table below reports consumer credit at the end of the month. You can derive the monthly change by subtracting one month from the next and multiplying by 12. Jan… 2008 …2,526.0Feb … 2008 … 2,536.9Mar … 2008 …2,549.0Apr … Continue reading

More Good News

The Lehmann Letter © Today the Census Bureau released April sales and inventory data as well as the inventory/sales ratio: http://www.census.gov/mtis/www/mtis_current.html The ratio continues to fall, and that’s good news. (Click on image to enlarge.) The ratio is heading south because goods on the shelf are declining faster than total sales. Once goods on the shelf reach an irreducible minimum, management will have to revive production in order to replenish them. That may take a while. You can see how swiftly the ratio rose in 2008. It will take some time to drop back down. When it does and production Continue reading

Less Borrowing. Less Spending

The Lehmann Letter © See today’s New York Times for an excellent article by David Leonhardt about the federal deficit and why it’s so hard to shrink it: http://www.nytimes.com/2009/06/10/business/economy/10leonhardt.html?_r=1&ref=todayspaper But even if we could reduce the deficit, another difficulty arises: Who will borrow and spend? If the government won’t, will we? Because the fact of the matter is that our economy depends upon borrowing and spending, and less borrowing equals less spending. So we’re damned if we do and damned if we don’t. We don’t want to resume our profligate ways, but we need that profligate spending to keep the Continue reading

345,000

The Lehmann Letter © Go to http://stats.bls.gov/ to see today’s lead story on the Bureau of Labor Statistics web site. The economy lost 345,000 jobs in May, a welcome relief from the 600.000+ average for most recent months. But the unemployment rate rose to 9.4%. Job Growth (Click on chart to enlarge) Recessions shaded You can see the seriousness of the situation. Few recessions – certainly no recent ones – have generated 500,000+ job losses. We’re glad May’s figure is only 345,000, but that’s as bad as the worst of the dot-com bust. It will be some time before the Continue reading

A Reader Writes

The Lehmann Letter © A reader raised the following issue regarding the federal stimulus: “When private parties borrow from banks, the money is partiallyfrom such things as deposits, but then multiplied by a factor of 20 orso as the banks “create” money. If the people borrowing can pay themoney back with interest, because their businesses are profitable orthey have a healthy income, everybody is happy. But if consumers can nolonger buy your products at the hoped for level, and people lose theirjobs, then you and they can’t repay the loans, and the banks fail. “If, as you have shown, the Continue reading

June Publication Schedule

The Lehmann Letter © Here’s the publication schedule for some of June 2009’s most important economic indicators. PUBLICATION SCHEDULE June 2009 Source (* below)…………Series Description…………Day & Date Quarterly Data BLS………………..…………Productivity…………………..Thu, 4th BEA……………………Balance of Payments……………..Wed, 17th BEA…………………………GDP……………………………Thu, 25th Monthly Data BEA……….….Personal Income & Consumption………….Mon, 1st ISM………………….Purchasing managers’ index……….Mon, 1st Fed……………………..Consumer credit……(Approximate).Fri, 5thBLS………………………….Employment………………… Fri, 5thCensus………………………Balance of trade………………Wed, 10thCensus………………………Retail trade…………………….Thu, 11thCensus………………………Inventories……………………..Thu, 11thBLS………………………….Producer prices……………….Tue, 16thFed…………………………..Industrial production………….Tue, 16thFed………………………….Capacity utilization…………….Tue, 16thCensus……………………..Housing starts………………….Tue, 16thBLS………………………….Consumer prices………………Wed, 17thConf Bd…………………….Leading indicators…………….Thu, 18th NAR…………………………Existing-home sales…….…….Tue, 23rdCensus……………………..New-home sales……………….Wed, 24thCensus…………………….Capital goods……………….…..Wed, 24th BEA……….….Personal Income & Consumption…………….Fri, 26th Conf Bd…………………….Consumer confidence…………Tue, 30th * BEA = Bureau of Economic Analysis of the U.S. Department of Continue reading