March Publication Schedule

The Lehmann Letter (SM) Some say the economy is gaining speed. We’ll see. ECONOMIC INDICATOR PUBLICATION SCHEDULE  March 2016  Source (* below)……Series Description……Day & Date  Quarterly Data BLS…….….Productivity…….……Thu, 3rd BEA..International Transactions..Thu, 17th BEA……….GDP & Profits………Fri, 25th Monthly Data ISM..Purchasing managers’ index…Tue, 1st BEA.New-vehicle sales.(Approximate).Thu, 3rd Fed. Consumer credit..(Approximate).Mon, 7th BLS……..….Employment……….   Fri, 4th Census………….Inventories………. Tue, 15th BLS…………Producer prices……. Tue, 15th Fed……….Capacity utilization……Wed, 16th Census………Housing starts…….Wed, 16th BLS……….Consumer prices.….. Wed, 16th NAR……Existing-home sales….Mon, 21st Census….New-home sales…… Wed, 23rd Census…….Capital goods…….. Thu, 24th Conf Bd..Consumer confidence..Tue, 29th *BEA = Bureau of Economic Analysis of the U.S. Department of Commerce *BLS = Bureau of Continue reading

Existing-Home Sales Remain in Range

The Lehmann Letter (SM) Existing-home sales are maintaining a range between 5.0 and 5.5 million at a seasonally-adjusted annual rate. This is well below their peak of over 7.0 million, reached before the Great Recession, but well above recession’s 4.0 million trough. On February 23 the National Association of Realtors reported 5.47 million existing-home sales in January: Existing-home sales, new home sales and residential construction are all on plateaus and do not show growth trends. 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    Continue reading

New Home Sales Stumble Again

The Lehmann Letter (SM) Yesterday morning the Census Bureau reported January sales of 494,000 new homes at a seasonally-adjusted annual rate: Once again home sales have fallen below 500,000. The chart reveals that recovery has been meager. The table reveals the plateau on which this indicator has remained over the past year. A breakthrough continues to be elusive. 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 Continue reading

Consumer Confidence Slips

The Lehmann Letter (SM) Yesterday’s Letter reported a slip in consumer confidence. The Conference Board said that Consumer Confidence fell in February to 92.2: As you can see from the table, consumer confidence rose steadily until 2015. Now it’s on a plateau. The latest data don’t indicate a breakthrough soon. 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        72.4 November     72.0 December     77.5 2014 January        79.4 February       78.3 March           83.9 April              81.7 Continue reading

Consumer Confidence and Home Sales Remain On Plateau

The Lehmann Letter (SM) Both consumer confidence and sales of existing homes remained on their respective plateaus according to reports released this morning. The Conference Board’s report may be found at: And the Realtors’ bulletin: Neither of these indicators has exhibited a significant upward trend lately. Questions or comments? Contact Mike Lehmann at (To be fully informed visit © 2016 Michael B. Lehmann      

Capacity Utilization On A Plateau

The Lehmann Letter (SM) On February 17 the Federal Reserve reported that industry’s capacity utilization remains on a plateau: Indeed, the table below reveals that capacity utilization (industry’s operating rate) has been stuck in neutral for two years. Some of that reflects weakness in mining, but manufacturing has also been weak. Capacity Utilization (Recessions shaded) Here’s capacity utilization’s 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     78.4 2014 January        78.1 February       78.8 March           79.1 April              79.0 May              79.1 June             79.2 July              Continue reading

Housing Starts On A Plateau

The Lehmann Letter (SM) This morning the Census Bureau reported 1.1 million housing starts in January: To repeat last month’s letter: You can see that starts have struggled upward since the recession’s trough. You can also see that starts are now barely higher than they’ve been during the depths of other recessions. Residential construction remains depressed. At this stage of the cycle starts should be 50% higher than they are now. Housing starts are on a plateau that is only half the level of their previous peak. Housing Starts (Recessions shaded) These figures are presented in thousands of homes Continue reading

Inventory/Sales Ratio Climbing

The Lehmann Letter (SM) On February 12 the Commerce Department released its latest monthly report on business sales and inventories: The data continue to show an ominous climb in the inventory/sales ratio. You can see the ratio spike with each recession. When sales fall, businesses accumulate stocks (inventories) of unsold goods. Inventories rise as sales fall, driving the inventory/sales ratio swiftly north. Inventory/Sales Ratio (Recessions shaded) Business sales peaked in the summer of 2014 and have fallen ever since. Inventories continued to grow and the ratio climbed. Businesses reduced inventories lately, but they grew again in the latest month. Continue reading

Profit Margins Have Definitely Peaked

The Lehmann Letter (SM) The Bureau of Labor Statistics’ February 4 productivity data reconfirm profit margins’ peak: (Scroll down to the Indexes table and divide implicit price deflator by unit labor costs for the latest quarter. See table below.) This is not surprising. The expansion is cooling and margins had risen to stratospheric heights. Profit Margins (Recessions shaded) Profit Margins: Implicit Price Deflator / Unit Labor Costs 2013 Q I                103.1 Q II               101.8 Q III              102.4 Q IV             103.2 2014 Q I                103.2 Q II               102.7 Q III              103.0 Q IV             101.6 2015 Q I                101.1 Q II               Continue reading

Consumer Credit Not Quitting

The Lehmann Letter (SM) On February 8 the Federal Reserve reported that consumer credit grew by $255.2 billion in December at a seasonally-adjusted annual rate: The chart and table are clear testimony to this indicator’s recent strength. Households are borrowing heavily to make their purchases. That’s a sign of optimism. 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 billion July                        $193.0 billion August                    $178.1 billion September              $200.6 billion October                  $204.2 billion November               $199.8 Continue reading