November Publication Schedule

The Lehmann Letter (SM) ECONOMIC INDICATOR PUBLICATION SCHEDULE November 2011 Source (* below)……Series Description……Day & Date Quarterly Data BLS……….Productivity………….Thu, 3rd BEA……….GDP & Profits…..……Tue, 22nd Monthly Data ISM..Purchasing managers’ index…Tue, 1st BEA.New-vehicle sales.(Approximate).Fr1, 4th BLS………….Employment………… Fri, 4th Fed. Consumer credit..(Approximate).Mon, 7thCensus………….Inventories………. Tue, 15thBLS…………Producer prices……. Tue, 15th Fed……….Capacity utilization……Wed, 16thBLS……….Consumer prices.….. Wed, 16thCensus………Housing starts…….Thu, 17thConf Bd…….Leading indicators….Fri, 18th NAR………Existing-home sales….Mon, 21st Census……….Capital goods…….. Wed, 23rd Conf Bd….Consumer confidence.. Tue, 29th Census……..New-home sales……Mon, 28th *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. Bureau of the Census*Conf Continue reading

Still No Sign of Recession

The Lehmann Letter (SM) Yesterday the Commerce Department reported 2.5% third-quarter GDP growth: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm Some fear that we are slipping into or will soon slip into recession. But recession has not begun as long as GDP – the total output of goods and services – continues to advance. This letter believes we will avoid recession as the economy continues to slowly improve. Unfortunately “slowly” is the key word. Rapid progress can’t occur until residential construction, motor vehicles and other durables hasten their improvement. And that won’t happen until household balance sheets recover: Liquidity rises, asset prices grow, debt falls and Continue reading

Wish We Could Do The Same

The Lehmann Letter (SM) Investors around the world celebrated Europe’s plan to resolve its debt crisis. The details must be arranged and the plan implemented, but a good start has been made. Meanwhile consider the irony. Here we have a continent of disparate peoples, cultures, history and nations that has fought like cats and dogs for centuries. But over the past 65 years Europe has slowly knit itself into a coherent and cohesive economic union. The job is not finished and pitfalls remain, but at the end of World War II most would have thought this kind of progress to Continue reading

While The World Waits

The Lehmann Letter (SM) While the world waits for news from Europe, the American economy proceeds in low gear. This morning the Census Bureau released reports on September capital-goods expenditures and new home sales. New orders for nondefense capital goods (nonmilitary machinery and equipment) held steady at $76.0 billion: http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf Place this number on the chart and you’ll see that new orders for capital goods have snapped back sharply from their recession lows. But they have not yet returned to the peak levels they enjoyed before the recession. Nondefense Capital Goods (Click on chart to enlarge) (Recessions shaded) New home Continue reading

Bad News

The Lehmann Letter (SM) This morning the Conference Board released its October consumer confidence survey: http://www.conference-board.org/press/pressdetail.cfm?pressid=4321 You can evaluate the 39.8 figure, following September’s 46.4 reading, by putting them in context on the chart. Consumer Confidence (Click on chart to enlarge) (Recessions shaded) Not only is the index heading south, it’s back to recession levels. Households are gloomy and that is a bad sign for future expenditures on homes, cars, other durables and discretionary items in general. It does not necessarily mean that we are headed back into recession. But it is further confirmation that the economy will remain sluggish. Continue reading

Worth Reading

The Lehmann Letter (SM) The world is waiting for Europe’s response to its sovereign-debt (what government’s owe) crisis, while we worry about the impact of households’ debt upon household spending. Here are two recent articles worth reading.On today’s New York Times op-ed page, Paul Krugman is pessimistic: http://www.nytimes.com/2011/10/24/opinion/the-hole-in-europes-bucket.html?_r=1&ref=todayspaper Prof. Krugman believes that Europe’s opportunity to act has passed. He believes Europe’s post-WWII string of successes is now be over. This letter is not so gloomy. Let’s wait and see. Regarding domestic developments, Saturday’s Wall Street Journal had an excellent account describing the debilitating impact of household debt on consumer expenditures: Continue reading

Residential Real Estate and Consumer Confidence

The Lehmann Letter (SM) At first glance the Census Bureau’s latest housing starts report looks good: http://www.census.gov/const/newresconst.pdf September starts were up by 15% to 658,000. If you study the chart, however, you will receive a little lesson on the use of statistics. Housing Starts (Click on chart to enlarge) (Recessions shaded) The 15% increase seems good until you notice that 658,000 starts still leaves us in the doldrums. It will take many months of 15% increases, without any backsliding, before we reach the 1 million total that will truly signal a breakthrough. That’s too bad because the real-estate malaise holds Continue reading

Uh Oh!

The Lehmann Letter (SM) So many eyes are turned to Europe, sometimes a domestic statistic escapes widespread attention. The Federal Reserve recently reported that consumer credit fell by $114.0 billion in August (the latest available month) on a seasonally-adjusted annual basis: http://www.federalreserve.gov/releases/g19/current/g19.htm (Subtract the August level from the July level and multiply by 12.) You can see from the chart that these data display considerable volatility, so one month’s drop may not signal anything significant. But you can also see that, after many months of decline, consumer credit began growing once again. Now we must be on the alert: Is Continue reading

Recession?

The Lehmann Letter (SM) Today’s New York Times carried a grim front-page article on Europe’s prospects: http://www.nytimes.com/2011/10/05/business/global/europe-finds-slope-ahead-is-growing-ever-steeper.html?ref=todayspaper Entitled, “In Europe, Signs of 2nd Recession With Wide Reach,” its key paragraph said: “Greece, Ireland, Portugal and Spain are already in downturns or fighting to avoid them, as high unemployment and austerity belt-tightening take their toll. But in the last few weeks, even prosperous Germany and France, the Continent’s powerhouses, have started to be dragged down, hurt by the ebbing of business orders from indebted countries in the rest of Europe.” In other words: Greece, Ireland, Portugal and Spain are cutting their Continue reading

October’s Economic Indicators

The Lehmann Letter (SM) ECONOMIC INDICATOR PUBLICATION SCHEDULE October 2011 Source (* below)……Series Description……Day & Date Quarterly Data BEA……….GDP & Profits…..……Thu, 27th Monthly Data ISM..Purchasing managers’ index…Mon, 3rd BEA.New-vehicle sales.(Approximate).Wed, 5th BLS………….Employment………… Fri, 7th Fed. Consumer credit..(Approximate).Fri, 7thCensus………….Inventories………. Fri, 14thFed……….Capacity utilization……Mon, 17thBLS…………Producer prices……. Tue, 18th BLS……….Consumer prices.….. Wed, 19thCensus………Housing starts…….Wed, 19thNAR………Existing-home sales….Thu, 20th Conf Bd…….Leading indicators….Thu, 20th Conf Bd….Consumer confidence.. Tue, 25th Census……..New-home sales……Wed, 26th Census……….Capital goods…….. Wed, 26th *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. Bureau of the Census*Conf Bd = Continue reading