October Publication Schedule

The Lehmann Letter (SM) Are we at a cyclical peak? Is the expansion behind us? We’ll see what the indicators tell us in October. ECONOMIC INDICATOR PUBLICATION SCHEDULE October 2016 Source (* below)……Series Description……Day & Date Quarterly Data BEA………….GDP…………..……Fri, 28th Monthly Data ISM..Purchasing managers’ index…Mon, 3rd BEA.New-vehicle sales.(Approximate).Wed, 5th BLS………….Employment…………   Fri, 7th Fed. Consumer credit..(Approximate).Fri, 7th BLS…………Producer prices……. Fri, 14th Census………….Inventories………. Fri, 14th Fed……….Capacity utilization……Mon, 17th BLS………….Consumer prices.…..Tue, 18th Census………Housing starts…….Wed, 19th NAR………Existing-home sales….Thu, 20th Census……..New-home sales……Wed, 26th Census……….Capital goods…….. Thu, 27th Conf Bd….Consumer confidence.. Tue, 25th  *BEA = Bureau of Economic Analysis of the U.S. Department of Commerce *BLS Continue reading

No Consumer Confidence Breakthrough

The Lehmann Letter (SM) On September 27 The Conference Board reported September Consumer Confidence rose to 104.1 from 101.8 in August: https://www.conference-board.org/data/consumerconfidence.cfm To repeat an observation from an earlier edition of this letter: Consumer confidence has fluctuated around 100.0 for over a year. Does that mean consumer confidence has peaked for this cycle? Could be. And that would not be a good omen. 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     Continue reading

New Home Sales Break Through 600,000

The Lehmann Letter (SM) On September 26 the Census Bureau reported August sales of 609,000 new homes at a seasonally-adjusted annual rate: http://www.census.gov/construction/nrs/pdf/newressales.pdf As the chart and table show, that’s a substantial improvement over earlier-in-the-year data. The big question: Will the upward trend continue? 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              457,000 June             408,000 July              403,000 August          Continue reading

The Fed: Not Yet

The Lehmann Letter (SM) On September 21 the Federal Reserve’s Open Market Committee, which sets the interest rate at which banks lend reserves to one another, issued a statement worth reading in detail: http://www.federalreserve.gov/newsevents/press/monetary/20160921a.htm “…The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to remain low in the near term, in part because of earlier declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of past declines in Continue reading

Existing-Home Sales Disappoint

The Lehmann Letter (SM) This morning the National Association of Realtors (NAR) reported 5.33 million existing-home sales in August (at a seasonally-adjusted annual rate): http://www.realtor.org/news-releases/2016/07/existing-home-sales-ascend-again-in-june-first-time-buyers-provide-spark Lawrence Yun, NAR chief economist said: “Hopes of a meaningful sales breakthrough as a result of this summer’s historically low mortgage rates failed to materialize because supply and affordability restrictions continue to keep too many would-be buyers on the sidelines.” A glance at the chart reveals that existing-home sales remain in a range after recovering from 2009’s recessionary trough of under 4.0 million. Sales must break through 6.0 million before we can claim a true Continue reading

Housing Starts Barely Above Previous Recession Lows

The Lehmann Letter (SM) On September 20 the Census Bureau reported 1.1 million housing starts in August: http://www.census.gov/construction/nrc/pdf/newresconst.pdf Housing starts are barely above the cyclical troughs of earlier recessions. There is no sign of breakthrough to higher ground. Housing Starts (Recessions shaded) These figures are presented in thousands of homes started, so that 1.1 million is shown in its raw form of 1,080 for 1,080,000: 2013 January        888 February       970 March           994 April              826 May              920 June             852 July              891 August          898 September    860 October        921 November     1,104 December     1,010 2014 January        888 February       951 March           963 April              1,039 May              Continue reading

Manufacturers’ Earnings Are Flat

The Lehmann Letter (SM) Manufacturers’ earnings and margins as reported by the Census Bureau on September 6: http://www.census.gov/econ/qfr/mmws/current/qfr_mg.pdf Seasonally-adjusted second-quarter earnings were $128.7 billion and margins were 8.18 cents per dollar of sales: The charts and table indicate earnings and margins are flat. Manufacturers’ Profits (Recessions shaded) Manufacturers’ Profit Margins (Recessions shaded) Here are the figures we have reported in the past, together with today’s update. Earnings in billions of dollars and margins in cents per dollar of sales, both seasonally adjusted: 2013 First Quarter           153.0            9.04 Second Quarter       144.4            8.54 Third Quarter          147.8            8.72 Fourth Continue reading

Consumer Credit Remains Strong

The Lehmann Letter (SM) On September 8 the Federal Reserve reported that July consumer credit grew by $212.6 billion at a seasonally-adjusted annual rate: http://www.federalreserve.gov/releases/g19/current/ The chart and table reveal that this resumes consumer credit’s heady pace. We’ll keep track of the trend. 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 billion December               $190.3 billion 2014 January                  $186.6 billion Continue reading

Autos Cooling?

The Lehmann Letter (SM) On September 6 the Commerce Department reported 16.9 million new-vehicles sold in August 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].) Are sales cooling? They were up around 18.0 million. Now they’re hanging out at 17.0 million. Both numbers are strong. But does this mean we’re past the peak? New-Vehicle Sales (Recessions shaded) New-vehicle sales in millions at a seasonally-adjusted annual rate. 2013 January        15.4 February       15.6 March           15.4 April              15.4 May              15.4 June             Continue reading

Corporate Profits Struggle

The Lehmann Letter (SM) On August 26, along with its announcement that second-quarter 2016 GDP grew by 1.1%, the Bureau of Economic Analysis reported $1,626.9 billion in after-tax corporate earnings: http://www.bea.gov/iTable/iTable.cfm?ReqID=9&step=1#reqid=9&step=3&isuri=1&903=53 (Row 45) The chart and table reveal that profits snapped back soon after the recession. But now they are fluctuating in a range. Profits have not grown over the past four years. Corporate Profits (Recessions shaded) 2009                       $Billions: First Quarter           1,044.3 2010 First Quarter           1,450.2 2011 First Quarter           1,350.2 2012 First Quarter           1,727.4 2013 First Quarter           1,679.5 2014 First Quarter           1,657.8 2015 First Quarter           1,636.7 2016 First Quarter           Continue reading