November Publication Schedule

The Lehmann Letter (SM) Are we at a cyclical peak? Is the expansion behind us? Happy Halloween! ECONOMIC INDICATOR PUBLICATION SCHEDULE November 2016 Source (* below)……Series Description……Day & Date Quarterly Data BLS……….Productivity………….Thu, 3rd BEA……….GDP & Profits…..……Tue, 29th Monthly Data ISM..Purchasing managers’ index…Tue, 1st BEA.New-vehicle sales.(Approximate).Wed, 2nd BLS………….Employment…………   Fri, 4th Fed. Consumer credit..(Approximate).Mon, 7th Census………….Inventories………. Tue, 15th BLS…………Producer prices……. Wed, 16th Fed……….Capacity utilization……Wed, 16th BLS……….Consumer prices.….. Thu, 17th Census………Housing starts…….Thu, 17th 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 the U.S. Department of Commerce *BLS = Continue reading

Consumer Confidence Flat

The Lehmann Letter (SM) This morning The Conference Board reported October Consumer Confidence fell to 98.6 from 103.5 in September: 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     72.0 Continue reading

Existing-Home Sales Remain Flat

The Lehmann Letter (SM) On October 20 the National Association of Realtors (NAR) reported 5.47 million existing-home sales in September (at a seasonally-adjusted annual rate): 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 upward trajectory, and that level would still be well below the pre-recession 7.0+ million record. 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

Housing Starts No Higher Than Year Ago

The Lehmann Letter (SM) Housing Starts No Higher Than Year Ago Today the Census Bureau reported 1.0 million September housing starts at a seasonally-adjusted annual rate: Housing starts are no higher than a year ago. 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              986 June             Continue reading

Capacity Utilization Doesn’t Grow

The Lehmann Letter (SM) On October 17 the Federal Reserve reported September’s capacity utilization at 75.4%: The manufacturing, mining and public utility operating rate has not grown for several years. 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              79.3 August          79.1 September    79.4 October        79.1 November     79.8 December     79.6 2015 January        79.1 February       79.0 March           78.2 April              77.9 May              Continue reading

Will the Fed Stop The Market’s Rise?

The Lehmann Letter (SM) Low interest rates were probably responsible for the stock market’s peak even as earnings fell and the P/E rose. Investors were driven to the market by paltry interest-earning alternatives to stocks. Examine the table below. It features the stock market (S&P 500), earnings per share at an annual rate (EPS) and the price/earnings ratio (P/E). The S&P and the P/E can’t keep going north as EPS go south. Especially if the Fed raises rates. Annually                  S&P              EPS              P/E Jan. 1, 2010            1169.43        60.93            19.19 Jan. 1, 2011            1325.83        81.31            16.31 Jan. 1, Continue reading

Business Equipment

The Lehmann Letter (SM) On September 28 the Census Bureau reported on new orders for nondefense capital goods: New orders are now in the low $60 billions. The chart and table reveal they were $10 billion more a year ago. New Orders for Nondefense Capital Goods Excluding Aircraft (Recessions shaded) New Orders for Nondefense Capital Goods, Excluding Aircraft in $Billions: 2013 January        70.1 February       66.3 March           65.8 April              67.5 May              68.0 June             68.5 July              67.1 August          68.1 September    66.8 October        65.8 November     69.7 December     69.1 2014 January        67.8 February       67.8 March           71.0 April              70.2 May              69.2 June             72.9 July              Continue reading

Consumer Credit At A Record Pace

The Lehmann Letter (SM) On October 7 the Federal Reserve reported that August consumer credit grew by $310.5 billion at a seasonally-adjusted annual rate: Last month this letter commented on consumer credit’s heady pace. You can observe the record-setting trend in the chart and table. 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 Continue reading

Hiring Slows Again

The Lehmann Letter (SM) This morning the Bureau of Labor Statistics announced: “Total nonfarm payroll employment increased by 156,000 in September, and the unemployment rate was little changed at 5.0 percent…..” You can find the full report at: This follows a revised gain of 167,000 in August, down from a revised 252,000 in July. In addition, the workweek has fallen slightly lately. The economy may be cooling. Questions or comments? Contact Mike Lehmann at (To be fully informed visit © 2016 Michael B. Lehmann          

Manufacturing Steady State Continues

The Lehmann Letter (SM) On October 3 the Institute for Supply Management (ISM) reported its Purchasing Managers’ Index (PMI) for September at 51.5: This index provides a barometer of manufacturing activity. Anything below 50 = Contraction; above 50 = Expansion. To repeat last month’s observation: As you can see from the chart and table, the index has fallen from its post-recession bump and is hovering around 50. Sometimes it’s a little higher; sometimes it’s a little lower. There has been no substantial manufacturing growth in the past year. Purchasing Managers’ Index (Recessions shaded) 2015             PMI January        53.5 February       52.9 Continue reading