November Publication Schedule

The Lehmann Letter (SM) The November publication schedule bears witness to the federal government’s continuing struggle with the effects of the shutdown. The statistical releases have not yet returned to their normal schedule. But they are almost there. The following reflects best efforts at accuracy. ECONOMIC INDICATOR PUBLICATION SCHEDULE  November 2013  Source (* below)……Series Description……Day & Date  Quarterly Data  BLS……….Productivity………….Thu, 14th BEA……….GDP & Profits…..……Tue, 26th Monthly Data ISM..Purchasing managers’ index…Fri, 1st BEA.New-vehicle sales.(Approximate).Tue, 5th BLS………….Employment…………   Fri, 8th Fed. Consumer credit..(Approximate).Thu, 7th Census………….Inventories………. Wed, 20th BLS…………Producer prices……. Thu, 21st Fed……….Capacity utilization……Fri, 15th BLS……….Consumer prices.….. Wed, 20th Census………Housing starts…….Tue, 26th NAR………Existing-home sales….Wed, Continue reading

Consumer Confidence: Shutdown’s Hit

The Lehmann Letter (SM) Last week this letter reported on Gerald Seib’s Wall Street Journal article that pointed to the federal shutdown’s damage to consumer confidence. Yesterday’s report from The Conference Board confirmed his fears: Consumer confidence fell to 71.2 in October from 80.2 in September. Consumer Confidence (Recessions shaded) Consumer confidence has to climb above 100 for households to exhibit sufficient optimism that we can depend upon their expenditures to propel a robust expansion. (To be fully informed visit © 2013 Michael B. Lehmann        

Manufacturing: Tale of Two Indicators

The Lehmann Letter  (SM) At the beginning of this month the Institute for Supply Management’s (ISM) Purchasing Managers’ Index (PMI) indicated strong manufacturing expansion. But yesterday’s (shutdown delayed) release of the Federal Reserve’s report on industrial production and capacity utilization was not so robust: The Fed continues to show capacity utilization below 80%. It was 78.3% in September. Capacity Utilization (Recessions shaded) Strong industrial expansion strains capacity. At less than 80%, we’re not there yet. So the ISM’s and Fed’s reports are at odds. Who’s correct? Doesn’t matter. One confirms (or contradicts) the other. If they’re not in sync, Continue reading

Business Capital Equipment: Long Run Slowdown?

The Lehmann Letter (SM) If a picture is worth a thousand words, this letter can be brief. New Orders for Nondefense Capital Goods (Recessions shaded) Connect the peaks from 1960 through 2000. Now connect the troughs for the same years. The upward sweep of the trend is unmistakable. Then do the same for 2000 through this year. The year 2000 is a clear inflection point. The trend flattened sharply. Now consider last week’s announcement from the Census Bureau: Business ordered $80.7 billion of new equipment in August. That’s not enough to break the pattern since 2000. Capital expenditures have Continue reading

Europe: Two Views of Recovery

The Lehmann Letter (SM) The federal shutdown has drawn the world’s attention lately, but two analyses of Europe’s situation appeared in yesterday’s papers. Apparently Europe has recovered sufficiently to forestall plans for further integration. Begin with this New York Times article by Jack Ewing and Raphael Minder: “Signs of Life in Euro Zone Could Point to Recovery” Here are key elements of its upbeat view: “All the usual caveats still apply, but there is consistent evidence that the worst may be over for Europe’s economy. “Five years after the start of a financial crisis that set off broad economic, Continue reading

Consumer Confidence: Shutdown’s Impact

The Lehmann Letter (SM) The Conference Board is scheduled to publish its consumer confidence report on October 29. But in an October 22 Wall Street Journal article Gerald F. Seib forecast the federal shutdown’s depressing effect: “Shutdown’s Biggest Toll: Less Confident Consumers” Mr. Seib said: “The many and sometimes tortured estimates of the economic cost of this month’s 16-day government shutdown have missed what likely is the most important factor: Washington’s misadventures have extracted a historically high toll on America’s confidence….. “There is significant evidence that the government shutdown started precisely such a cycle by sending confidence into a Continue reading

Auto Sales: Temporary Dip?

The Lehmann Letter  (SM) The chart reveals that new-vehicle sales have been charging forward toward the pre-recession 16/17 million level they enjoyed before the recession. New-Vehicle Sales (Recessions shaded) But the Commerce Department recently released its shutdown-delayed September figures: (Find motor vehicles under supplemental estimates, then open spreadsheet and click on tab six at bottom [scroll down for latest data].) New-vehicle sales dropped to 15.2 million at a seasonally-adjusted rate from their August 16.0 million level. Let’s hope that setback is temporary. We’ve had too much stormy weather lately. (To be fully informed visit © 2013 Michael B. Continue reading

Back on the Job

The Lehmann Letter (SM) The Bureau of Labor Statistics is back on the job following the federal shutdown and beginning to release the statistical reports postponed by the closure. You can find this morning’s report on the employment situation at: The report began: “Total nonfarm payroll employment rose by 148,000 in September, and the unemployment rate was little changed at 7.2 percent….” The following link presents the job-growth numbers in detail: But the overall job-growth number – 148,000 – is most important and requires the same comment generated by so many of its predecessors: It’s not big enough. Continue reading

Home Sales Stall: A Pause or a Plateau?

The Lehmann Letter (SM) Internet data sources for government statistics will come back online now that the shutdown is over. There are, however, a number of private data sources unaffected by the shutdown. The Realtors’ tabulation of existing-home sales is one: Here’s what they said in today’s bulletin about a slight decline in September sales after a strong August: “After hitting the highest level in nearly four years, existing-home sales declined in September, but limited inventory conditions continued to pressure home prices in much of the country, according to the National Association of Realtors®. “Total existing-home sales1, which are Continue reading

Win the Battle, Lose the War?

The Lehmann Letter (SM) The Democrats won the battle over the shutdown and debt default. But Republicans may win the war over the budget because trends here and abroad are running in their favor. That’s due to the popularity of a new kind of austerity that favors spending cuts over tax increases. Begin at home. Government spending at the federal, state and local level has not grown since the peak of the bubble that led to the Great Recession. That’s anomalous:  In past recessions increased government spending made up for the shortfall in private spending. Not so this time. There Continue reading