Consumer Confidence Slips a Little

The Lehmann Letter (SM) Lately we’ve seen indicators for residential building stuck on a plateau. Upward movement has ceased. This morning The Conference Board reported Consumer Confidence fell to 88.7 in November, a setback from last month’s 94.1: As the table reveals, however, Consumer Confidence has risen over the past two years. The latest figure means the last six months have shown some weakness. Consumer Confidence Recessions shaded Here’s the record since the beginning of 2013 (1985 = 100.0): 2013 January        58.4 February       68.0 March           61.9 April              69.0 May              74.3 June             82.1 July              81.0 August          81.8 September    80.2 October        Continue reading

US, UK and Germany: Comparing Fiscal and Monetary Policies

The Lehmann Letter (SM) See today’s Wall Street Journal for an article posted yesterday by Jon Hilsenrath comparing US, British, Euro zone and Japanese monetary and fiscal policies. The comparison would have been different if Germany replaced the entire European continent. But first take a look at the article: “What Big Economies Got Right, or Wrong, After Crisis” The first two paragraphs summarize the conclusion: “The divergent policy paths taken by the world’s advanced economies provide lessons for global leaders navigating difficult post-crisis environments. The U.S. and U.K. appear to have gotten something right, while the eurozone and Japan Continue reading

Existing-Home Sales Uptick

The Lehmann Letter (SM) Yesterday morning the National Association of Realtors reported 5.26 million existing-home sales for October at a seasonally-adjusted annual rate: Can you spot a trend if you update the chart and table with the latest data? Existing Home Sales (Recessions shaded) Existing home sales in millions: 2013 March           4.96 April              4.99 May              5.15 June             5.16 July              5.38 August          5.33 September    5.26 October        5.13 November     4.83 December     4.87 2014 January        4.62 February       4.60 March           4.59 April              4.66 May              4.89 June             5.03 July              5.14 August          5.05 September    5.18 October        5.26 It’s difficult. October sales were the highest in Continue reading

Zero Inflation

The Lehmann Letter (SM) Once upon a time folks worried that the Federal Reserve’s expansionary policies would generate inflation. Today some are concerned about deflation. This morning the Bureau of Labor Statistics reported zero inflation in consumer prices for October. (To be fully informed visit   © 2014 Michael B. Lehmann  

Housing Starts Hanging at One Million

The Lehmann Letter (SM) There are two observations that seem clear from the chart and table below: Housing starts are hanging out at one million and they need to be much higher before we can say this sector has recovered. This morning the Census Bureau reported 1.0 million October housing starts at a seasonally adjusted annual rate: Compare that with the chart and the monthly figures below the chart. Housing Starts  Recessions shaded These figures are presented in thousands of homes started, so that 0.9 is shown in its raw form of 896 for 896,000: 2013 January        896 February       Continue reading

Inflation Low and Stable

The Lehmann Letter (SM) This morning the Bureau of Labor Statistics said producer (wholesale) prices rose by 2.4% at a seasonally-adjusted annual rate (monthly rate X 12): Both the chart and table reveal benign inflation. Change in Producer Prices Recessions shaded Here’s the recent record. 2014 January        3.6 February       2.4 March           3.6 April              2.4 May              2.4 June             2.4 July              2.4 August          0.0 September    -0.1 October        2.4 Inflation is rising at 2% annually. Hardly a cause for concern. (To be fully informed visit © 2014 Michael B. Lehmann      

Industrial Backslide

The Lehmann Letter (SM) Last month it appeared that capacity utilization (aka factory operating rate) might be breaking out of its plateau and heading upward. This morning’s Federal Reserve report disappoints that hope: U.S. manufacturing, mining and public utilities operated at a 78.9% rate in October. The chart informs us of strong recovery from recession’s devastating slump. But the table reveals a leveling in the past year. Capacity Utilization Recessions shaded Here’s the recent record. 2013 January        77.4 February       77.8 March           78.0 April              77.8 May              77.8 June             77.8 July              77.5 August          77.8 September    78.3 October        78.2 November     78.5 December     Continue reading

Tech Trade With China

The Lehmann Letter (SM) The historic climate understanding was the most important outcome of the president’s China visit. But let’s not neglect the trade deal also emanating from that meeting. Here’s what Andrew S. Ross said about it in November 13’s San Francisco Chronicle: “$1 trillion tech deal calls for slashing tariffs” Mr. Ross begins by highlighting the benefits to the San Francisco Bay Area: “…It is sure to provide a further boost, if any   was needed, to the Bay Area’s most remunerative industry. But it’s also a sign China will become a more serious economic competitor than Continue reading

Climate Deal: We’re Already Part Way

The Lehmann Letter (SM) Yesterday’s climate announcement by China’s and America’s leaders is key to bringing along the rest of the world. See this morning’s New York Times for an intriguing article, posted yesterday by Henry Fountain and John Schwartz that features the substantial progress already accomplished: “Climate Accord Relies on Policies Now in Place” The article makes clear that the U.S. and China are already on track to achieve their ambitious goals: “For all the pronouncements about the United States and China reaching a historic climate pact, the agreement they announced Wednesday does not signal a seismic shift Continue reading