August Publication Schedule

The Lehmann Letter (SM) This morning the Commerce Department released its advanced estimate of second-quarter GDP and its revised estimate of first-quarter GDP: GDP grew by 1.7% in the second quarter and 1.1% in the first quarter. Those are not strong numbers. Here is our calendar for August. Let’s hope we see more strength as August unfolds.  ECONOMIC INDICATOR PUBLICATION SCHEDULE  August 2013  Source (* below)……Series Description……Day & Date Quarterly Data BEA……..….GDP ..……..…Thu, 29th BEA……..….Profits ..……..…Thu, 29th BLS…Productivity & Costs ….Fri, 16th Monthly Data ISM..Purchasing managers’ index…Thu, 1st BEA.New-vehicle sales.(Approximate).Mon, 5th BLS………….Employment…….…   Fri, 2nd Fed. Consumer credit..(Approximate).Thu, 8th BLS…………Producer Continue reading

Consumer Confidence

The Lehmann Letter (SM) Consumer confidence has recovered well from the depths of the Great Recession. The chart shows it had fallen below 30 and is now up to 80. But the chart also shows that consumer confidence needs to continue moving upward to 100 before we can say that the economy is expanding strongly. Consumer Confidence (Recessions shaded) This morning’s report from the Conference Board showed a slight setback: Consumer confidence came in at 80.3 for July. That could be disappointing if it is not just a pause in an upward climb. We’ll see. Stay tuned. (To be Continue reading

Doves vs. Hawks: The Forecasting Record

The Lehmann Letter (SM) Ever since the onset of the Great Recession five years ago, economists and policymakers have attempted to forecast the course of recovery and expansion. Early on inflation doves and hawks argued whether or not the Fed’s expansionary policy would or wouldn’t ignite an unacceptably high rate of increase in prices. The doves said: Excess slack in the economy (high unemployment and low capacity utilization) would suppress inflation until the economy reached full employment. The hawks said: Excessive money supply-growth would ignite inflation. Today’s Wall Street Journal has an article by Jon Hilsenrath and Kristina Peterson that Continue reading

Holding Back Homebuilding

The Lehmann Letter (SM) Home prices are rising rapidly but homebuilding remains at a low level despite recent gains. Homebuilding’s failure to expand rapidly continues to constrain economic mansion. Two recent Wall Street Journal articles shed light on the problem. On July 23 Conor Dougherty and Dawn Wotapka wrote about the difficulties facing first-time home buyers: “Housing Recovery Increasingly Prices Out First-Time Buyers” They said that first-time buyers, a key market segment, face higher financial barriers since the Great Recession. Low-down-payment loans are increasingly scarce and lenders have erected higher hurdles. Here are some key paragraphs: “First-time home buyers, Continue reading

Terrific Capital Goods Report

The Lehmann Letter (SM) This morning the Census Bureau gave a terrific report for June orders of nondefense capital goods: They rose to $91.6 billion, a level that’s off the chart below. New Orders for Nondefense Capital Goods (Recessions shaded) For months new orders languished at $70 billion. Now they are up to a level that exceeds the record set during the 2003-2007 expansion. That’s a good sign. We won’t have a robust expansion without the participation of business investment in plant and equipment. There’s just one caveat: These figures include new orders for aircraft, which are highly volatile. Continue reading

June New-Home Sales Strong

The Lehmann Letter (SM) We have suffered from a half-hearted recovery from the Great Recession. The economy has failed to expand rapidly overall and has remained bifurcated. Some indicators are strong, such as the stock market and auto sales, some have remained weak, such as business capital expenditures and residential construction. Earlier in the month this letter observed a setback for June housing starts and existing-home sales. But this morning the Census Bureau reported a nice increase in new-home sales: June new-home sales jumped to 497,000 in June from 459,000 in May. New Home Sales (Recessions shaded) You can Continue reading

Earnings Problem

The Lehmann Letter (SM) Yesterday’s Wall Street Journal carried a story by Ben Casselman on the economy’s prospects: “U.S. Growth Outlook Stuck in Neutral” It began: “The long-anticipated acceleration in the U.S. economy has been put on hold once again. “Disappointing economic and corporate-earnings reports in recent weeks have dashed hopes that the U.S. was at last entering a phase of solid, self-sustaining growth. Instead, while economists expect a modest second-half pickup in growth, few are predicting the kind of substantial rebound needed to quickly bring down unemployment, raise wages and insulate the U.S. from economic threats abroad.” At Continue reading

Real Estate Remains a Puzzle

The Lehmann Letter (SM) The blogger is back after a brief but debilitating illness. Thank you for your patience. This morning we have further evidence of real estate’s puzzling condition. There are so many signs that say “Go!” – especially prices – although building and sales have yet to take off into the sustained high ground of genuine expansion. The Realtors reported June new-home sales at 5.08 million: That’s a slight dip from May. More troubling, sales have held at around 5 million since January. Existing Home Sales (Recessions shaded) You can see the nice recovery from the deep Continue reading

Housing Starts: Poised for a Surge Or on a Plateau?

The Lehmann Letter (SM) Federal agencies reported a number of statistics while the blogger was on bereavement leave. Yesterday the Census Bureau announced 836,000 housing starts in June: The chart shows a healthy resurgence in building activity since the Great Recession. But housing starts reached 854,000 last September and have demonstrated no clear trend since. Housing Starts (Recessions shaded) June’s figure was a slight drop from May. But month-to-month noise is not important. It’s the trend that counts. And the recent trend is not clear. (To be fully informed visit © 2013 Michael B. Lehmann