February Economic Indicator Publication Schedule

The Lehmann Letter (SM) Attitudes about the economy are upbeat. Last Friday the Bureau of Economic Analysis released its advance estimate for 2010 fourth-quarter GDP growth: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm The number looked good: A 3.2% gain at an annual rate. But signs of weakness remain, especially in residential real estate. A list of important economic indicators and their February publication schedules appears below. The Lehmann Letter will review those that merit particular attention. ECONOMIC INDICATOR PUBLICATION SCHEDULE February 2011 Source (* below)……Series Description……Day & Date Quarterly Data BEA…………………GDP…………..……Fri, 25th BLS………….Productivity……………Thu, 3rd Monthly Data ISM..Purchasing managers’ index…Tue, 1st BLS…………….Employment………… Fri, 4th BEA..New-vehicle sales.(Approximate).Mon, Continue reading

Capital Goods: Pause or Stall?

The Lehmann Letter (SM) Is the economic recovery on track for rapid expansion, or is the good news just a head feint? This letter has noted that some of the most important indicators are still in the doldrums. There are encouraging signs, yet they remain too few to indicate a trend. Yesterday’s letter featured an example: New-home sales are up, but have not broken into optimistic territory. This morning’s Census Bureau report on durable goods further illustrates the problem: http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf Here are December, November and October 2010 data on new orders for nondefense capital goods (machinery and equipment): $61.4 billion, Continue reading

Home Sales Up: But Is It a Trend?

The Lehmann Letter (SM) This morning the Census Bureau announced in December new-home sales of 329,000: http://www.census.gov/const/newressales.pdf That was a 17.5% improvement over November’s 280,000. Good news. New Home Sales (Click on chart to enlarge.) Recessions shaded But the chart, once again, illustrates the problem of dealing with percentages when starting from a small base. The 17.5% gain sounds impressive until you post 329,000 on the chart. Then it doesn’t seem like much. The trend line has to surge well above 400,000, heading toward 600,000, before we can say that new-home sales have left the bad news behind them. It’s Continue reading

Dow Milestone

The Lehmann Letter (SM) The stock market was down in mid-session-trading today, but the Dow recently passed an important milestone. It’s now higher than the peak reached 11 years ago. The Dow closed above 11,700 in 2000 at the height of the dot-com boom, and went on to close over 14,000 in 2007 with the peak of the real-estate bubble. The Dow has been trading in a range for over a decade, and must rise another 25% to break out of that range. The NASDAQ’s story is different. It’s at 2,700, about half of where it was at the dot-com Continue reading

Inflation: Don’t Worry Yet

The Lehmann Letter (SM) Rapidly rising commodity prices have generated concern that economic recovery will bring escalating inflation. Last week the Bureau of Labor Statistics announced that consumer prices rose at a 6% annual rate in December, although they increased by only 1.2% when food and energy are excluded: http://stats.bls.gov/news.release/pdf/cpi.pdf That highlights commodities’ role. Primary products such as raw materials, foodstuffs and fuels have accounted for most of the gains. The developing worlds’ rapid economic recovery is responsible for the surge in primary-product prices. As the Chinese economy expands it gobbles up minerals (iron ore, bauxite), fuels (oil, coal) and Continue reading

Statistical Paradox

The Lehmann Letter (SM) This morning’s Census Bureau housing report illustrates why economic forecasting is not easy: http://www.census.gov/const/newresconst.pdf Building permits leapt upward to their highest level in nine months while housing starts fell to their lowest level since WWII. New building permits indicate construction projects that are about to commence. The problem is: Some projects will not start and will eventually be abandoned. That’s why housing starts are a better indicator of what will actually happen. Truth be told: They move together over the cycle. Housing Starts(Click on chart to enlarge.) Recessions shaded That said, this morning’s report that 635,000 Continue reading

Strong Showings

The Lehmann Letter (SM) This morning’s statistical releases included strong gains in industrial production and capacity utilization as well as a big jump in business sales. You can find the Federal Reserve’s capacity-utilization report at: http://www.federalreserve.gov/releases/g17/Current/default.htm Just scroll down to the second blue banner titled “Percent of capacity” and look under December 2010. You’ll see that it was 76.0 and made a nice jump up from earlier months that seemed stuck in the 75% range. It may look like much ado about nothing, but if you place 76% on the chart it appears that capacity utilization is climbing out of Continue reading

Autos Accelerating

The Lehmann Letter (SM) The latest Detroit auto show, with its new cars and new concepts for future models, is emblematic of the domestic industry’s turnaround. Ford is strong and Chrysler and GM have successfully emerged from their restructurings. It’s a new day. This morning’s New York Times published an article by Bill Vlasic and Nick Bunkley describing the benefits accruing to Big Three autoworkers from the industry’s recent success: http://www.nytimes.com/2011/01/13/business/13auto.html?_r=1&ref=todayspaper The Commerce Department recently reported that December new-vehicle sales rose to 12.5 million: http://www.bea.gov/national/index.htm#gdp (Scroll down to Motor vehicles under Supplemental Estimates. See table 6 at the bottom of Continue reading

President Obama’s Re-Election Campaign

The Lehmann Letter (SM) Tonight President Obama speaks to the nation from Tucson regarding the awful events of last weekend. Let us hope his words help heal and move the political discourse to a higher and calmer plane. Meanwhile the business of politics rolls on. Today’s Wall Street Journal carried an article by Jonathan Weisman and Laura Meckler entitled “Obama Begins Gearing Up Re-Election Bid:” http://online.wsj.com/article/SB10001424052748703791904576076150469705650.html?mod=ITP_pageone_1 An historical view of the chart highlights the difficulty facing the president. Consumer Confidence (Click on chart to enlarge.) Recessions shaded Consumer confidence hovered at a low of 60 when Presidents Jimmy Carter and Continue reading

More Good News on Consumer Credit

The Lehmann Letter (SM) Friday’s employment report overshadowed another report released that day. The Federal Reserve announced that consumer credit grew by $16.8 billion at an annual rate in November: http://www.federalreserve.gov/releases/g19/Current/ That was a small but important gain. Total consumer credit outstanding peaked at $2,561.1 billion in 2008. By the end of last year’s third quarter (September 30, 2010) consumer credit outstanding had fallen to $2,394.6 billion, a loss of almost $200 billion. Now it’s back up to $2,403.0 billion, reflecting small but important gains in October and November. (Multiply monthly gains by 12 to obtain the annual change.) If Continue reading