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Author: Brian Lego

The Death of U.S. Manufacturing Was Greatly Exaggerated

The Death of U.S. Manufacturing Was Greatly Exaggerated

It has become almost an accepted truth that the U.S. is no longer a major global player when it comes to manufacturing activity. Well guess what: this represents more rumor than fact as Mark Perry illustrates in an op-ed appearing in today’s Wall Street Journal. While the U.S. economy has certainly experienced a great deal of structural change over the past several decades (shift from goods production to services), innovations and other forms of technological progress have allowed the nation’s Read more [...]
A November (not) worth remembering

A November (not) worth remembering

As I have said in previous posts, one single data point should not be used to draw firm conclusions about underlying trends in the U.S. economy. But, oh what a disappointment today’s employment report was. According to the BLS, total nonfarm payrolls did increase on net by 39,000 during November, but this gain was significantly below consensus expectations of 145,000; in addition, the diffusion index, which measures the breadth of job growth across industries, slipped to its lowest level since Read more [...]
Some Good News at Last

Some Good News at Last

After several months of less-than-stellar readings on the U.S. economy, including last week’s lackluster print on Q3 GDP, a few positive data points released this week offer at least some hope for optimism going forward. Both the ISM manufacturing and non-manufacturing indexes registered gains compared to the previous month and some of the key components of each index (new orders, production, exports, etc.), suggest conditions in the economy-at-large are improving, albeit at a slow pace. Today’s Read more [...]
A Little Ray of Sunshine? Perhaps.

A Little Ray of Sunshine? Perhaps.

Consumers have been fairly cautious with their wallets throughout the economic recovery. It has been hard to blame them, too, given the lackluster pace of improvement for the labor market as well as the significant overhang of debt still plaguing many consumers. Indeed, households have had little cause for celebration thus far and few incentives to ratchet up their spending activities. Even though September retail sales data do not portray a surge in spending or the unleashing of pent-up demand, Read more [...]
Still Singing the Job Market Blues

Still Singing the Job Market Blues

Another month, another disappointing employment report. According to the BLS, ex-census payrolls declined on net by 18,000 during September (and the prior two months were also revised downward) and the unemployment rate continued to hold at a stubbornly-high level of 9.6 percent. In the past year, the economy has added 334,000 payrolls—an average of less than 30K per month—and total employment is nearly 7.8 million below its December 2007 peak. For the sake of illustration, even if payroll Read more [...]
Not for Sale

Not for Sale

Today’s release of August home sales data reveals what is essentially a market bouncing along the bottom. Over the last two months sales have remained only slightly below the all-time low that was set back in May 2010 in the immediate aftermath of the federal homebuyer tax credit’s expiry. In addition to weak sales, homes are staying available on the market for a long period of time—a median of 10.3 months as of August 2010. One of the biggest problems plaguing housing Read more [...]
More Signs of Gloom

More Signs of Gloom

Approximately once every six weeks, the Federal Reserve published the Beige Book, which contains a collection of anecdotal reports of local economic conditions within the 12 regional Fed districts. In general, this report is not given a lot of fanfare, but during times like these any new piece of information that can offer insight about the economy’s trajectory is near and dear. So what is the main takeaway this time? Essentially, the report highlighted the importance of a region’s industrial Read more [...]
Still Limping Along

Still Limping Along

The August employment report shows an economy that continues to struggle to gain any momentum. Net job creation totaled a meager 60,000 last month (when one excludes the loss of temporary decennial census positions) and the unemployment rate crept higher to 9.6 percent. While a 60K average upward revision for June and July payroll data was a positive, employers have added fewer than 230,000 jobs since the recovery’s likely start time last summer. The median duration of unemployment dropped Read more [...]
House of Cards

House of Cards

Now that the distorting effects of the federal homebuyer tax credits have worked their way through the system, demand is deteriorating and the market appears to be retrograding toward an eventual equilibrium at a lower price level. Sales of existing single-family homes fell by more than 27 percent during July, reaching their lowest level since May 1995. For new single-family homes, the month-to-month decline was appreciably smaller in percentage terms at 12.4 percent, but this drop caused this series Read more [...]
Diamond in the Rough (or just A Shiny Piece of Coal?)

Diamond in the Rough (or just A Shiny Piece of Coal?)

Amidst all the growing concerns over a double-dip recession, the manufacturing sector has stood out as one of the U.S. economy’s strongest performers. In fact, manufacturing has been the only major sector to come anywhere close to textbook V-shaped recovery. That good fortune continued during July, with industrial output surging 1.1 percent from the prior month and roughly 8 percent from last year. The auto industry contributed to the bulk of last month’s growth, but traditional manufacturers Read more [...]