GDP

The Lehmann Letter (SM) Today the Commerce Department’s Bureau of Economic Analysis released its estimate of first-quarter GDP (the nation’s output): http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm The release said: “Real gross domestic product … increased at an annual rate of 3.2 percent in the first quarter of 2010… In the fourth quarter, real GDP increased 5.6 percent…. The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by decreases in state and local government spending and in residential fixed investment. Imports, which are a Continue reading

A Long Way To Go

The Lehmann Letter (SM) Today the Conference Board released its April consumer confidence figure: http://www.conference-board.org/economics/ConsumerConfidence.cfm At 57.9 consumer confidence is now higher than it has been for a year and a half and twice as high as it was during the depths of recession. Lynn Franco, Director of The Conference Board Consumer Research Center said, “Consumer confidence, which had rebounded in March, gained further ground in April. The Index is now at its highest reading in about a year and a half (Sept. 2008, 61.4). Consumers’ concerns about current business and labor market conditions eased again. And, their outlook regarding Continue reading

Three Reports This Week

The Lehmann Letter (SM) Three economic reports released this week show strength, but also illustrate how far the recovery must proceed before it becomes a true expansion. Yesterday The National Association of Realtors announced 5.35 million existing-home sales that an annual rate in March:http://www.realtor.org/press_room/news_releases/2010/04/ehs_favorable That was a strong improvement over February’s 5.01 million report. But updating the chart below in your mind’s eye shows the difficulty in assessing recent developments. Existing Home Sales (Click on chart to enlarge.) Recessions shaded The initial announcement of the tax advantage for homebuyers caused sales to pop up over 6 million. Then they slumped Continue reading

Leading Indicators

The Lehmann Letter (SM) Yesterday The Conference Board announced that its Leading Economic Index ® increased by a strong 1.4% in March. This index of leading economic indicators, as is often called, has now increased steadily for a year. It’s a good sign of economic recovery. The index’s upward march also fuels the controversy over whether or not the recession is over. That is a matter of definition. It is customary to speak of the end of recession once the downturn is over. By that standard there can be little doubt: The recession is over and recovery has begun. But Continue reading

The Past Week

The Lehmann Letter (SM) Two reports out this week illustrate the difficulty of the current economic recovery. The Census Bureau reported (http://www.census.gov/const/newresconst.pdf) 685,000 housing starts in March. The chart below illustrates that this is a good jump above the trough of about half-a-million starts. Housing Starts (Click on chart to enlarge.) Recessions shaded But the strong relative increase cannot obscure how far we have to go. Any level below 1 million remains depressed. We are off the bottom; we’re not out of the ditch. The Federal Reserve’s March data for capacity utilization tell a similar story:http://www.federalreserve.gov/releases/g17/Current/default.htm . Capacity utilization reveals Continue reading

April’s First Half

The Lehmann Letter (SM) Three important economic indicators show that April started strong, although cautionary signs remain. The Purchasing Managers’ Index was 59.6% in March, with any reading over 50% indicating expansion. This index tells us whether or not large industrial firms face tighter supply conditions when purchasing key inputs and materials. Tighter supply conditions indicate that manufacturing is gaining strength as firms compete for scarceer resources. You can see from the chart that the index plunged during the recession. Manufacturers found it easy to purchase key inputs and materials during slack economic conditions. But now the economy has gained Continue reading

The Lehmann Letter (SM) Earnings As the Dow approaches 11,000, many people ask, “What’s behind this remarkable surge?” The economic recovery is important and so are low interest rates. When interest-earning assets yield little, investors are more likely to turn to the stock market. But corporate earnings have been crucial, too. Recently the Bureau of Economic Analysis announced fourth-quarter 2009 after-tax corporate profits: http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=53&Freq=Qtr&FirstYear=2007&LastYear=2009 (See line 45 at this link.) After-tax corporate profits increase by 50% over the past year to $1,270.1 billion in the fourth-quarter of 2009. If you plug that number into the chart below you will see Continue reading

April Publication Schedule

The Lehmann Letter (SM) Here’s the publication schedule for some of April 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 April 2010 Source (* below)……Series Description……Day & Date Quarterly Data BEA…………………………GDP……………………………Fri, 30th Monthly Data ISM………………….Purchasing managers’ index……….Thu, 1st BLS………………………….Employment………………… Fri, 2ndFed…………Consumer credit…(Approximate).Wed, 7thCensus……………………..Balance of trade……………… Tue, 13thCensus………………………Retail trade…………………….Wed, 14thCensus………………………Inventories…………………….. Wed, 14thBLS………………………….Consumer prices……………… Wed, 14thFed…………………………Industrial production………….Thu, 15thFed………………………….Capacity utilization…………….Thu, 15thCensus……………………..Housing starts………………….Fri, 16thConf Bd…………………….Leading indicators…………….Mon, 19th BLS………………………….Producer prices………………. Thu, 22nd NAR…………………………Existing-home sales…….…….Thu, Continue reading