Free Markets, Free People

Economy

Economic Statistics for 10 Jan 11

Today’s economic statistical releases:

The NFIB Small Business Optimism Index  rose for a 4th straight month by 1.8 points to 93.8.

Inventory build corrected sharply in November wholesale trade, increasing only 0.1% as businesses kept their inventories in check.

In weekly retail sales: ICSC-Goldman Store Sales plunged -5.4% in the Jan 7 week, with Year on year sales growth only 2.8%. Redbook also reports a strong sales decline, with the year-on-year rate falling from 4.9% to 3.3% last week.

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Dale Franks
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Economic Statistics for 6 Jan 12

Today’s economic statistical releases:

The Monster employment index fell 7 points in December to 140, as global economic uncertainty keeps hiring plans cautious.

But you don’t care about that. You care about the December Employment Situation. The BLS reports that 200,000 net new jobs were created last month, with the unemployment rate falling to 8.5%. Average hourly earnings increased by 0.2% while the average workweek rose 0.1 hours to 34.4 hours. The labor force shrunk by 50,000 but household employment rose 176,000 and the number of unemployed declined 226,000, according to the household survey. The labor force participation rate held steady at 64.0%. The U-6 unemployment rate, the broadest measure of unemployment, fell from 15.6% to 15.2%. Every indication is of a slowly and mildly improving labor market in December.

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Dale Franks
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Economic Statistics for 5 Jan 12

Today’s economic statistical releases:

Auto Sales were mixed last month, coming in at a 13.6 million annual rate, the same as November. Light vehicle sales rose 2.8%, however, the best since the "Cash for Clunkers" program expired in August 2009.

Chain stores are reporting sales throughout the day today. So far, about 1/2 of the reporting stores show improved year-on-year sales from last month. Additionally, some chains are raising their investor guidance following the sales results, confirming improved profitability and sales.

The Challenger Job-Cut Report shows that layoff announcements totaled 41,785 in December. That’s right on trend for the last 3 months.

The ADP Employment Report indicates a big increase in private payroll growth, to 325,000 new jobs for December. While I suspect the overall December Employment Situation, which the BLS will release tomorrow, will be at least mildly positive, 325,000 new jobs seems like a stretch for the month. December’s always a tricky month anyway, due to seasonal employment, and the adjustment factors that try to account for it. A BLS increase of 160,000+ new jobs wouldn’t surprise me tomorrow, though, nor would a tick down in the Unemployment rate.

Initial jobless claims fell 15,000 last week to 372,000 from the prior week’s revised 387,000 (an upward revision of 6,000).

The Bloomberg Consumer Comfort Index rose to -44.8 in the period ended January 1 from -47.5 the prior week.

The ISM’s Non-Manufacturing Index rose slightly to 52.6, below expectations for 53.4, and only 0.6 higher than last month.

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Dale Franks
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Economic Statistics for 4 Jan 12

Today’s economic statistical releases:

Factory orders rose 1.8% in November, mainly on aircraft orders. Ex-transportation, orders rose 0.3%.

A short week and seasonal adjustments aside, the MBA reports that mortgage activity declined, as mortgage applications fell by -3.7%. Purchase applications fell  a steep -9.7%, while re-finance apps dropped by -1.9%.

In weekly retail sales, ICSC-Goldman Store Sales rose a strong 1.2% over the last week, and 5.3% over last year. Likewise, Redbook reports a year-over-year same-store sales increase of 4.9%.

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Dale Franks
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Economic Statistics for 3 Jan 12

Today’s economic statistical releases:

The ISM Manufacturing Index rose to 53.9 from last month’s 52.7, as manufacturing growth accelerated. This confirms the reports released last week from the various Fed regions, most of which showed manufacturing growth.

Construction spending has been volatile, but the latest month shows a monthly increase of 1.8%, and a year-over-year increase of 0.5%.

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Dale Franks
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The Problem, and the False Solution

Mark Steyn makes an interesting—indeed, vitally important—point about government spending. The Left is always keen on telling us that we are under-taxed, or that the "rich" aren’t paying their fair share, or some such nonsense.  We’ve argues long and hard here that what we face is not a revenue problem, but a spending problem. Mr. Steyn pithily sums up an important bit of evidence for that assertion.

The total combined wealth of the Forbes 400 richest Americans is $1.5 trillion. So, if you confiscated the lot, it would barely cover one Obama debt-ceiling increase.

That’s really the problem in a nutshell. This week, the President asked for a $1.2 trillion debt increase.  We could pay for it, I suppose, by confiscating all the wealth of the Forbes 400, and have a nice $300 billion left over…but there won’t be too many people left that we can soak to cover the next debt ceiling increase. Also, as a point of academic interest, President Obama’s debt ceiling increase is $200 billion more than the entire national debt was in 1980.

To the extent we do have a revenue problem, perhaps it’s not that the rich pay too little, but rather that the poor do. 47% of American’s don’t pay any income tax at all. Which means that the "soak the rich" argument can really be boiled down to the 47% of Americans that don’t pay income taxes think the remaining 53% aren’t paying their fair share.

Well, someone isn’t, at any rate.

At the deepest levels within our governing structures, we are committed to living beyond our means on a scale no civilization has ever done. Our most enlightened citizens think it’s rather vulgar and boorish to obsess about debt. The urbane, educated, Western progressive would rather "save the planet," a cause which offers the grandiose narcissism that, say, reforming Medicare lacks.

And reforming Social Security, while we’re at it. Which we aren’t. And which, combined, will eat up the entire Federal budget in the not-too-distant future.

Something that can’t go on forever, won’t. It’d be great to have a first-class military, generous Medicare and Social Security benefits. Along with all the rest of the coddling state that supports in the grand manner to which we’ve become accustomed. But the future won’t allow us to be that generous. You see, we’re heading to a $16.5 trillion national debt, because, instead of being prudent with our money in order to meet all those future obligations, we blew it.

We spent money we didn’t have to build carrier groups and JDAMs, No Child left Behind and Medicare Part D. At the current rate, the federal government will, sometime this century, consist of a single department that does nothing but collect taxes and issue Social Security checks, because there won’t be one red cent left over for Defense, Justice, State, Commerce, Agriculture, or Treasury. And, we probably won’t be able to afford even that.

Mainly, because we won’t be able to produce much of anything.

Last January, the BBC’s Brian Milligan inaugurated the New Year by driving an electric Mini from London to Edinburgh, taking advantage of the many government-subsidized charge posts en route. It took him four days, which works out to an average speed of 6 mph — or longer than it would have taken on a stagecoach in the mid-19th century. This was hailed as a great triumph by the environmentalists. I mean, c’mon, what’s the hurry?

What indeed? In September, the 10th anniversary of a murderous strike at the heart of America’s most glittering city was commemorated at a building site: The Empire State Building was finished in 18 months during the Depression, but in the 21st century the global superpower cannot put up two replacement skyscrapers within a decade.

The 9/11 memorial museum was supposed to open on the 11th anniversary, this coming September. On Thursday, Mayor Michael Bloomberg announced there is "no chance of it being open on time." No big deal. What’s one more endlessly delayed, inefficient, over-bureaucratized construction project in a sclerotic republic?

This is—as hard as it may be to believe—the same country that, in 1940, had an army smaller than Rumania, and by 1945, had the military power to, had we wanted, rule the globe. Now, we’re the country that can’t replace the World Trade Center in 10 years. This is not emblematic of a can-do country with the willingness to attack and solve problems with a vengeance.

But the president thinks that if we can only tax millionaires more, we can fix this place up quick.

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Dale Franks
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Economic Statistics for 29 Dec 11 (Updated)

Today’s economic statistical releases:

In a Dec 24 week clouded by the need for estimates, initial unemployment claims rose 15,000 to 381,000. Despite that, the 4-week moving average fell 5,750 to a 375,000, the eighth decline in 9 weeks.

The Chicago Purchasing Managers Index remains steady at 62.5 this month, but new orders are especially strong at 68.0.

The Bloomberg Consumer Comfort Index dropped to -47.5 last week, down from a reading of -45.0 last week.

Low prices and mortgage rates are boosting the housing sector, pushing the pending home sales index up 7.3% to 100.1.

The Kansas City Fed Manufacturing Index was supposed to be released this morning, but apparently, the Fed is delaying the release. Probably holiday-related issues.

UPDATE: The Kansas City Fed Manufacturing Index was much lower than expected, coming in at -4, vice analysts’ expectations of 6.

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Dale Franks
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Economic Statistics for 27 Dec 11

Today’s economic statistics releases:

S&P/Case-Shiller reports home prices are still trending downwards, with prices down -0.6% last month, following last month’s -0.7% decline.On a year-over-year basis, prices have dropped -3.4%.

Optimism on jobs and income resulted in a 9.3 point rise in consumer confidence, with the index at 64.5 for December.

The Richmond Fed Manufacturing Index came in at 3, showing mildly positive manufacturing expansion in the Richmond Fed district. This confirms similar readings from both the Philly Fed and Empire State surveys, both of which also showed mild manufacturing expansion. Conversely, the Dallas Fed reports that manufacturing activity in Texas declined in December as the general business activity index dropped to -3.0 from 3.2 in last month.

Investor confidence remains steady according to the State Street Investor Confidence Index, which holds steady at 99.3.

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Dale Franks
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Economic Statistics for 23 Dec 11

Today’s economic statistical releases:

A big surge in civilian aircraft pushed durable goods orders up 3.8%. Ex-transportation, orders rose 0.3%. On a year-over-year basis, orders were up 12.1% overall, and 7.2% ex-transportation.

Both personal income and personal spending rose by 0.1% in November.

New home sales rose 1.6% in November to a 315,000 annual unit rate. Over the last few months, sales have picked up modestly, but from a very low levels, and house prices have continued to decline,m down 3.8% last month to a median price of $214,100.

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Dale Franks
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