Free Markets, Free People

Economy

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Economic Statistics for 23 Oct 14

The Bloomberg Consumer Comfort Index rose 1.5 points to 37.7 in the latest week.

Initial weekly jobless claims rose 17,000 to 283,000. The 4-week average fell 3,000 to 281,000, a 14-year low. Continuing claims  fell 38,000 to 2.351 million.

The Chicago Fed National Activity Index rose strongly from -0.21 to 0.47 in September.

The FHFA purchase only house price index rose 0.5% in August.

The Markit PMI manufacturing index flash for October fell -1.7 points from the final September reading to 56.2.

The Kansas City Fed manufacturing index fell -2 points to 4 in October.

The Fed’s balance sheet rose $7.3 billion last week, with total assets of 4.482 trillion. Reserve bank credit rose $15.2 billion.

The Fed reports that M2 money supply fell by $-39.3 billion in the latest week.


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Economic Statistics for 22 Oct 14

Consumer prices rose 0.1% in September at both the headline and core rates of the CPI. On a year-over-year basis, the CPI is up 1.7%, again at both the core and headline levels.

The MBA reports that, thanks to falling lending rates, mortgage applications rose a sharp 11.6% last week, with purchases down -5.0% but refis up 23.0%.


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The executive end run

Want to know what the Berghdal investigation found?  You’ll have to wait till after the election.  Want to know what your new health insurance rates will be?  You’ll have to wait until after the election.  Why?  Because it appears they both will be unpopular with most of the citizenry.

Interested in what is happening on the immigration front?  You’ll have to wait until after the election … however there does seem to be some prep going on as AP reports:

The Homeland Security Department appears to be preparing for an increase in the number of immigrants living illegally in the country to apply for work permits after President Barack Obama announces his long-promised plans for executive actions on immigration reform later this year.

U.S. Citizenship and Immigration Services confirmed to The Associated Press that it has published a draft contract proposal to buy the card stock needed to make work permits and Permanent Resident Cards, more commonly known as green cards. The proposal calls for providing material for at least 5 million cards a year, with as many as 9 million “during the initial period … to support possible future immigration reform initiative requirements.” The contract calls for as many 34 million cards over five years.

USCIS, the Homeland Security agency that oversees immigration benefits, produces about 3 million work permits and Green Cards annually, so the new contract would at least provide the Obama administration with the flexibility to issue far more work permits or green cards even if it chose not to exercise that option.

So they’re either ordering a 10 year supply or something is up.  ABC’s Rick Klein reports:

Republicans can thank the reliable old federal bureaucracy for their latest little gift-wrapped present. The AP reports that the Department of Homeland Security is soliciting millions of new green cards – yes, the physical paperwork needed for legal status – “to support possible future immigration reform initiative requirements.” That’s right: The federal government is already ordering as many as 34 million new cards over five years to accommodate legal changes that haven’t been announced, much less approved by Congress. If and when this factoid makes its way into a campaign ad or a stump speech, it will be another reminder of the questionable political strategy of the White House deciding to delay immigration action until after the election. You don’t get full credit for not acting if everyone knows you’re about to. And the idea that tax dollars are set to be expended to support a sweeping new policy, before that policy is even announced or enacted? How better to confirm voters’ mistrust in government?

Congress? This president don’t need no stinkin’ Congress.  And certainly not one that is run by Republicans.  Nope … instead that will provide the perfect excuse (despite the obvious premeditation) to blame the GOP and take unilateral action.

And what will Congress do about such an end run?  Well, likely nothing if their history is an indication.

So here we are with a wretched economy, the lowest labor participation rate in decades, stagnant wages and what does it appear our brilliant President is about to do?

That’s why you have to wait till after the election to find out.

~McQ

 

Economic Statistics for 15 Oct 14

The Fed’s Beige Book report indicates economic growth—again—is modest to moderate. Slowing inflation and weak growth overseas is spurring concern about slower economic growth. There is even talk, based on this report, of another new round of Quantitative Easing.

Reinforcing the Fed’s concerns, Producer Prices for Final Demand fell -0.1% in September, while prices less food and gas—the so-called “core rate”—were unchanged. The PPI-FD less food, energy & trade services also fell 0.1%. Goods prices fell -0.2% and services prices fell -0.1%.  On a year-over-year basis, the PPI-FD is up 1.6% at the headline level and 1.8% at the core.

The Treasury reports that a revenue surplus of $105.8 billion in September pushed the FY2014 deficit down to $483.4 billion from $680.2 billion in FY2013.

The October Atlanta Fed Business Inflation Expectations survey shows that businesses expect 1.9% inflation over the next year. This is down from 2.1% in the previous month.

The Empire State manufacturing index for October fell sharply to 6.17 from September’s 5-year high of 27.54.

September retail sales fell a worse-than-expected -0.3% in September. Sales less autos fell -0.2% and sales less autos and gas fell -0.1%. Analysts expected an overall increase of 0.3%.

The MBA reports that mortgage applications rose 5.6% last week, with purchases down -1.0% but refis up 11.0%.


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Economic Statistics for 9 Oct 14

Chain stores today are reporting moderate increases in rates of year-on-year sales growth in September.

A drop in wholesale sales of -0.7% swelled inventories by 0.7%, leading to a hefty stock-to-sales ratio of 1.19.

Initial weekly jobless claims fell 1,000 to 287,000. The 4-week average fell 7,000 to 287,750. Continuing claims  fell 21,000 to 2.381 million.

The Bloomberg Consumer Comfort Index rose 2 points to 36.8 in the latest week.

The Fed’s balance sheet rose $5.1 billion last week, with total assets of $4.455 trillion. Reserve bank credit rose $3.9 billion.

The Fed reports that M2 money supply fell by $-7.3 billion in the latest week.


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More self-inflicted economic problems on the way

The Obama economy is a mess, with median incomes retreating, fudged employment numbers and generally the usual mess you can expect from a over-regulated and highly manipulated “market”.  In other words, it stinks because of government as much as anything else.  Our betters seem not to understand the very basics of human nature – humans respond to incentives.  So they continue to cobble together more and more feel good projects (i.e. they make the “elite” feel good) that backfire.  Why?  Because humans respond to disincentives as well – and their feel good projects are long on disincentives, something they can’t seem to wrap their heads around.

By design, the next example of that will take place after the November mid-term elections:

Starting this year, the United States’ working population will face three major employment disincentives resulting from the very benefits the Affordable Care Act (ACA) provides: (1) an explicit tax on full-time work, (2) an implicit tax on full-time work for those who are ineligible for the ACA’s health insurance subsidies, and (3) an implicit tax that links the amount of available subsidies to workers’ incomes.

A new study published by the Mercatus Center at George Mason University advances the understanding of how much these ACA taxes will reduce overall employment, and why. It concludes that the reduction will be nearly double that projected by previous analyses. Labor markets ultimately will reduce weekly employment per person by about 3 percent—translating to roughly 4 million fewer full-time-equivalent workers.

4 million more jobs in an economy already suffering one of the lowest labor participation rates in its history.  Why have “middle class” wages stagnated or dropped?  One major reason has to do with disincentives like this.  Its like the $15 minimum wage trope.  Force it on business and they have a “disincentive” to hire people for jobs that aren’t worth that and an incentive to automate or go short handed and double up the work on someone else.

That’s precisely the type of disincentive that ObamaCare is about to inflict on the economy.  We’ll then hear the usual nonsense about greedy and uncaring companies and how the “market” has failed us.  It is as predictable as the next blizzard being somehow blamed on global warming.

Meanwhile, these 4 million that may join the currently unemployed are real people who will suffer real problems because of the disincentive provided by a very poorly thought out law that won’t effect those who passed it.  All Democrats can hope is that enough people will drop off the unemployment roles by the time the next presidential election rolls around that the fudged unemployment stats look acceptable.

What a hell of a way to run a railroad.

~McQ

 

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