Archive for May 2016

Should Britain vote to exit the EU on 6/23/16, I suspect that the pound will fall in value, UK inflation will rise and the economy will likely enter a mild recession. Depending on the magnitude of these changes, the Bank of England may choose to raise rates to dampen inflation or cut rates to boost…

While April housing starts rose 6.6% M-o-M and declined 1.7% Y-o-Y, housing starts have been flat for a year. Since 4/15, the peak in monthly seasonally adjusted starts was a rate of 1.213 million in 6/15; the trough was 1.063 million in 5/15. However, this stability exists because the 14% increase in single-family activity has…

The latest teeth gnashing about poor retail sales is misplaced. Retail sales weakness is due to less spending by foreigners due to the strong dollar, more online spending and more service spending. Over the last decade, spending on clothes/shoes grew just 1%/year while spending on cable/TV/radio services rose 5.1%/year. Similarly, Y-o-Y sales at clothing and…

The Friday File: The top coffee producing nation is Brazil, which harvested 6 billion lbs. in 2014. Vietnam follows with 3.6 billion, then Colombia at 1.5 billion, Indonesia at 900 million, and Ethiopia, where coffee was discovered, at 860 million. The largest producer of generally higher-priced Arabica beans is Brazil, followed by Columbia. The largest…

While it has taken 8.25 years, inflation-adjusted GDP in the 19 country Eurozone (not to be confused with the 28 nation European Union) is back where it was on 1/1/08! Among the largest nations, Germany is tops, with its GDP up 5.5%; French GDP is up 3.5%. Conversely, Spanish GDP remains 3% down and in…

The median priced home is $220,000. Assuming 10% down and thus a $198,000 mortgage, at the current 30-year mortgage rate of 3.7%, that works out to a payment of $917/month. Add $180/month for property taxes and the total is $1,097/month – an annual total just $564 higher than the 2015 standard marital deduction of $12,600!…

15.6% of high school graduates do nothing. While down from the 2/14 peak of 16.9%, it’s substantially above the previous recession high of 14.8% set in 2003/2004. For whites, the current rate of 13.7% is higher than any time prior to 2009. For Hispanics, the 17% rate is close to the lowest level ever, while…

Friday’s Employment data was puzzling. While the economy created 160,000 jobs, it was the weakest growth since 9/15 and the labor force participation rate fell from 63% to 62.8%. But Y-o-Y wage growth increased from 2.3% to 2.5%, the 4th best reading since 10/09, the number of long-term unemployed fell to its 2nd best level…

The Friday File: The most used banknote in circulation is the $1 bill featuring Washington, which accounts for 30% of all bills. The $100 Ben Franklin comes in second, accounting for 28% of all bills (probably because of drug cartel use). The $20 bill featuring (for now) Andrew Jackson is next at 23%, followed by…

Q1/16 non-farm labor productivity growth fell at a seasonally-adjusted annualized rate of -1%; Y-o-Y productivity growth rose just 0.6%. Since the end of the recession in 6/09, productivity growth has averaged a dismal 1.3%. These weak numbers help explain how millions of workers have found employment, yet GDP growth remains very weak. From 1990 through…