The Chairman Speaks

The Lehmann Letter © On December 7 Federal Reserve Chairman Ben Bernanke spoke before the Economic Club of Washington, D.C.: Chairman Bernanke dealt with four frequently asked questions:1. Where is the economy headed? 2. What has the Federal Reserve been doing to support the economy and the financial system? 3. Will the Federal Reserve’s actions lead to higher inflation down the road? 4. How can we avoid a similar crisis in the future? Here are brief excerpts from some of Chairman Bernanke’s responses. 1. Where is the economy headed? “Though we have begun to see some improvement in economic Continue reading

Good News!

The Lehmann Letter © “The unemployment rate edged down to 10.0 percent in November, and nonfarmpayroll employment was essentially unchanged (-11,000), the U.S. Bureau of Labor Statistics reported today.” That’s the opening sentence from today’s employment report: Good news indeed! When you connect the latest dot to the chart below you can see how the situation has improved. Job Growth Click on image to enlarge) Recessions shaded And there was more good news in the report. Manufacturing overtime, which had been 2.8 hours/week in the second quarter and 3.0 hours in the third, rose to 3.4 hours in November. Continue reading

Manufacturing Moves Forward

The Lehmann Letter © Today the Institute for Supply Management reported that its Purchasing Managers’ Index fell slightly in November to 53.6: Recent data are: November….53.6October…….55.7September.52.6August……..52.9July…………48.9 Since any number over 50 signals expansion, you can see that manufacturing has been moving forward for the past four months. Purchasing Managers’ Index (Click on image to enlarge) Recessions shaded The chart also makes clear that manufacturing has been in the doldrums and is only now pulling out of a steep trough. There are three principal influences on manufacturing: (1) Autos and residential construction and other household expenditures, (2) Business capital expenditures Continue reading