December Publication Schedule

The Lehmann Letter (SM) Will the Federal Reserve raise interest rates? Perhaps these indicators will provide a clue. ECONOMIC INDICATOR PUBLICATION SCHEDULE  December 2015  Source (* below)……Series Description……Day & Date  Quarterly Data BLS…. Productivity & Costs….Wed, 2nd BEA…US International Transacs…Thu, 17th  BEA……….GDP & Profits…..……Tue, 22rd Monthly Data ISM..Purchasing managers’ index…Tue, 1st BEA…New-vehicle sales…(Approx).Thu, 3rd BLS………….Employment…………   Fri, 4th Fed…Consumer credit..(Approximate).Mon, 7th Census………….Inventories………. Fri, 11th BLS…………Producer prices……. Fri, 11th Fed……….Capacity utilization……Wed, 16th Census………Housing starts…….Wed, 16th BLS……….Consumer prices.….. Tue, 15th NAR………Existing-home sales….Tue, 22nd Census……….Capital goods…….. Wed, 23rd Census……..New-home sales…… Wed, 23rd Conf Bd….Consumer confidence.. Tue, 29th *BEA = Bureau of Economic Analysis of Continue reading

New Home Sales Level Off Again

The Lehmann Letter (SM) On September 24 tis Letter reported solid improvement in new home sales. This morning the Census Bureau reported October sales of 495,000 new homes at a seasonally-adjusted annual rate: http://www.census.gov/construction/nrs/pdf/newressales.pdf Once again home sales have fallen below 500,000. The chart reveals that recovery has been meager. New Home Sales (Recessions Shaded) Here are the seasonally adjusted data at an annual rate: 2013 January        442,000 February       439,000 March           449,000 April              451,000 May              430,000 June             463,000 July              376,000 August          380,000 September    399,000 October        444,000 November     446,000 December     441,000 2014 January        446,000 February       417,000 March           410,000 April              410,000 May              Continue reading

Corporate Profits Fall Back

The Lehmann Letter (SM) This morning the Bureau of Economic Analysis (BEA) reported that corporate profits had fallen back to earth. The BEA’s Table 1.12. National Income by Type, line 45, informs us that after-tax corporate profits were $1,785.8 in the third quarter: http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&903=53 Our table shows that profits have not improved over the past year. Corporate Profits (Recessions shaded) $Billions: 2013 First Quarter           1,681.7 Second Quarter      1,688.2 Third Quarter          1,687.9 Fourth Quarter        1,713.2 2014 First Quarter           1,613.9 Second Quarter      1,700.2 Third Quarter          1,761.1 Fourth Quarter        1,700.5 2015 First Quarter           1,734.5 Second Quarter      1,844.6 Third Quarter          1,785.8 Questions or Continue reading

Has Housing Stalled?

The Lehmann Letter (SM) Yesterday the Census Bureau reported October starts of 1.1 million at a seasonally-adjusted annual rate http://www.census.gov/construction/nrc/pdf/newresconst.pdf Starts have maintained that level for a year. The chart reveals that’s far below typical at this phase of the cycle. It’s hard to believe starts will rise much further if the Federal Reserve begins to push rates higher. 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        888 February       970 March           994 April              826 May              920 June             852 July              891 Continue reading

CPI Rises 2.4% at Annual Rate

The Lehmann Letter (SM) This morning the Bureau of Labor Statistics reported a 2.4% (0.2% X 12) October increase in the Consumer Price Index (CPI) at a seasonally-adjusted annual rate: http://stats.bls.gov/news.release/cpi.nr0.htm That’s not excessive, but it’s sufficient for the Federal Reserve to justify an interest-rate increase before year’s end. Questions or comments? Contact Mike Lehmann at lehmannm@usfca.edu. (To be fully informed visit http://www.beyourowneconomist.com/) © 2015 Michael B. Lehmann    

The Stock Market

The Lehmann Letter (SM) The stock market has fluctuated in a range lately. Today and yesterday have not been encouraging. Consider these factors: Earnings per share (EPS) and the price/earnings ratio (P/E) for the Standard & Poor’s 500 (S&P). EPS collapsed during the recession, climbed to $100 and has recently receded to about $95. That’s not a good sign. It’s not likely to continue its upward. The economy is too weak and profit margins have ceased improvement. The P/E is 22. Anything over 20 is cause for concern, Low interest rates provide some leeway. But the Federal Reserve has threatened Continue reading

Consumer Credit’s Link to Auto Sales

The Lehmann Letter (SM) Personal experience provided most of us with evidence of the link between new-vehicle sales and consumer credit. Most of us finance auto purchases. This Letter has commented on new-vehicle sales’ robust growth. On November 6 the Federal Reserve reported that consumer credit grew by $347.0 billion in September at a seasonally-adjusted annual rate: http://www.federalreserve.gov/releases/g19/current/ The table reveals the strength of that performance. Consumer Credit (Change) (Recessions shaded) Monthly changes in consumer credit, seasonally adjusted at an annual rate: 2013 January                  $188.8 billion February                 $231.4 billion March                     $116.9 billion April                        $151.4 billion May                        $195.4 billion June                       $141.8 Continue reading

Full Employment at Last!

The Lehmann Letter (SM) Today the Bureau of Labor Statistics released the report for which everyone has been waiting: http://stats.bls.gov/news.release/empsit.nr0.htm The unemployment rate fell to 5% in October, the full-employment threshold. And job growth was a solid 271,000. Questions or comments? Contact Mike Lehmann at lehmannm@usfca.edu. (To be fully informed visit http://www.beyourowneconomist.com/) © 2015 Michael B. Lehmann        

Autos Remain in High Gear

The Lehmann Letter (SM) Will the Federal Reserve raise Rates? If the central bank is waiting for a signal from the economy, auto sales are clear. They’re booming On November 4 the Commerce Department reported October new-vehicle sales of 18.1 million at a seasonally-adjusted annual rate: http://www.bea.gov/national/index.htm#gdp (Find motor vehicles under supplemental estimates, then open spreadsheet and click on Table 6 at bottom – Column I [scroll down for latest data].) You can see from the table that in the last year new-vehicle sales have accelerated. New-Vehicle Sales (Recessions shaded) New-vehicle sales in millions at a seasonally-adjusted annual rate. 2013 Continue reading