Steady Progress

The Lehmann Letter © A week ago this blog mentioned the Census Bureau’s wholesale sales and inventories report. It indicated that manufacturing had turned an important corner. Two announcements today confirm that observation. The Census Bureau released data showing that sales and inventories for manufacturing and trade both grew in November and that sales gained more than inventories: http://www.census.gov/mtis/www/mtis_current.html . Sales grew for for over six months following nine months of decline, and inventories gained for three months following a year of decline. This demonstrates that business is sufficiently confident of its sales gain to begin rebuilding stocks of goods. Continue reading

Autos & Debt

The Lehmann Letter © The Bureau of Economic Analysis and the Federal Reserve have released their December and November figures for new-vehicle sales and consumer credit. You can find new-vehicle sales data at http://www.bea.gov/national/index.htm#gdp . Scroll down to the “Motor vehicles” link and go to table six of the spreadsheet. You’ll see that new-vehicle sales were 11.2 million in December. Now compare that to the historical data in the following chart. There’s been a gradual recovery from the 9.2 million low of last April, but it’s been a slow ascent. New-vehicle sales remain at lows not seen since the 1981-82 Continue reading

Accentuate the Positive

The Lehmann Letter © Today’s employment report from the BLS disappointed many: http://stats.bls.gov/news.release/empsit.nr0.htm December employment fell by 85,000 jobs and the unemployment rate remained at 10.0%. But manufacturing overtime held steady at 3.4 hours/week, a big improvement over the third quarter’s 3.0 hours/week. That’s a signal that manufacturing is recovering. Today’s Census Bureau report on wholesale sales and inventories confirmed the upward trend: http://www2.census.gov/wholesale/pdf/mwts/currentwhl.pdf Sales fell throughout the first half of the year, began to strengthen in the third quarter and then made a big gain in November. In response business also began rebuilding inventories in November. That’s significant because Continue reading

Vice-Chairman Kohn

The Lehmann Letter © Yesterday’s post discussed Federal Reserve Chairman Ben Bernanke’s January 3 speech at the annual meeting of the American Economic Association. Vice-Chairman Donald Kohn also addressed the Association that day: http://www.federalreserve.gov/newsevents/speech/kohn20100103a.htm He said: “Given the heavy costs that have resulted from the financial crisis, the question naturally arises as to whether the circumstances that caused the crisis could have been avoided…… But against this important objective we need to balance the potential costs and uncertainties associated with using monetary policy for that purpose, especially in light of the difficulty in judging the appropriateness of asset valuations. “One Continue reading

The Chairman Speaks

The Lehmann Letter © On January 3 Federal Reserve Chairman Ben Bernanke spoke before the annual meeting of the American Economic Association: http://www.federalreserve.gov/newsevents/speech/bernanke20100103a.htm Mr. Bernanke concluded his remarks by saying: “My objective today has been to review the evidence on the link between monetary policy in the early part of the past decade and the rapid rise in house prices that occurred at roughly the same time. The direct linkages, at least, are weak. Because monetary policy works with a lag, policymakers’ response to changes in inflation and other economic variables should depend on whether those changes are expected to Continue reading

Boulder in the Road

The Lehmann Letter © This blog has discussed the foreclosure crisis in earlier postings. Foreclosure is a tragedy for the families who lose their homes. It also impedes economic recovery by prolonging the real-estate slump. Foreclosed properties drag down home values and residential construction by swelling the glut of unsold houses. The larger the glut, the slower the recovery in real-estate prices and the smaller the incentive to build new homes. See Peter S. Goodman’s January 2 New York Times article for an excellent commentary on the problem: http://www.nytimes.com/2010/01/02/business/economy/02modify.html Mr. Goodman points out that the Obama administration’s efforts to relieve Continue reading

January Publication Schedule

The Lehmann Letter © Here’s the publication schedule for some of January 2010’s most important economic indicators. Go to http://www.beyourowneconomist.com/ and click on Seminars, then click on Economic Indicators to navigate the sites that provide the data and click on Charts for a visual presentation that you can update. PUBLICATION SCHEDULE January 2010 Source (* below)…………Series Description…………Day & Date Quarterly Data BEA…………………………GDP……………………………Fri, 29th Monthly Data ISM………………….Purchasing managers’ index……….Mon, 4thBLS………………………….Employment………………..… Fri, 8thFed………………..Consumer credit……(Approximate).Fri, 8thCensus………………………Balance of trade………………Tue, 12thCensus………………………Retail trade…………………….Thu, 14thCensus………………………Inventories……………………..Thu, 14thFed…………………………..Industrial production………….Fri, 15thFed………………………….Capacity utilization…………….Fri, 15thBLS………………………….Consumer prices………………Fri, 15thBLS………………………….Producer prices……………….Wed, 20thCensus……………………..Housing starts………………….Wed, 20thConf Bd…………………….Leading indicators…………….Thu, 21st Conf Bd…………………….Consumer confidence………… Thu, 21stNAR…………………………Existing-home sales…….…….Mon, 25thCensus……………………..New-home sales……………….Wed, Continue reading