Archive for February 2020

The Friday File: This year consumers will spend $27.4 billion, or $196.31/person on Valentine’s Day, shattering last year’s record of $20.7 billion. This year’s total includes the spending of $1.7 billion, $12.21/person, or 6% of all Valentine’s Day spending, on pets. 55% of the population plans to celebrate Valentine’s Day, up from last year but…

Recently, a raft of inflation measures have been reported, all totally benign. Overall GDP-wide inflation is just 1.4%; the Fed’s favorite measure of inflation, Personal Consumption Expenditure inflation is running at just 1.6%, and wage growth, no matter how measured, is running at 3% or less and declining. And, after subtracting productivity growth (which reduces…

In 2019, the US trade deficit shrank for the first time since 2013, from $628 billion to $619 billion; just 1.7%. Exports fell 0.1%, imports fell 0.4%. Imports from China fell 17.6%, but it was made up by a huge rise in imports from Vietnam and meaningfully higher deficits with six other nations. Our trade…

Last week, to no one’s surprise, the Fed left rates unchanged. But due to domestic inflation running well below its 2% target, weak global growth (and specifically weak global manufacturing activity), and now the Wuhan coronavirus, the concern is that weakness emanating primarily from abroad may well weaken inflation and GDP growth here. While a…

Net job growth of 225,000 in January, mild upward revisions to November and December, a nice jump in the labor force participation rate from 63.2% to 63.4%, the best rate since 6/13, making the unemployment rate rise from 3.5% to 3.6% a good thing, brands this a solid report. Wage growth remains subdued but ticked…

Rocking Rollers The Friday File: The tallest roller coaster in the world is the Kingda Ka at 456 feet in Jackson, New Jersey. It’s held the record since 5/05. The fastest coaster; the Formula Rossa which peaks at 149 mph in Abu Dhabi. The longest coaster is the Steel Dragon 2000, at 8,133 feet in…

The share price of Tesla has more than tripled since the end of July and Tesla is now the world’s second most valuable automaker at $160 billion, behind Toyota at $200 billion. The only problem: it’s a consistent money loser. It has never made an annual profit, ever, and 19Q3 was only the fifth profitable…

GDP Gouge While 2020 US GDP growth should be about 2%, two threats that could meaningfully impact the short run are Boeing, which will reduce 20Q1 GDP by 0.4% and the Wuhan Coronavirus, which may reduce GDP by around 0.3%. Fortunately, the economic losses should be made up relatively quickly once the MAX gets recertified…

Amazon’s 19Q4 corporate revenue hit $87.4 billion due to robust holiday sales, and operating income was $3.9 billion. These results made Amazon the 4th US firm to have a market cap of over $1 trillion. More interestingly, Amazon Web Services, its’ cloud-computing operation, had 19Q4 sales of $10 billion (barely 11% of all sales), but…

The US economy grew 2.1% in 19Q4 and 2.3% in CY2019. While that’s the slowest pace since 2016, it’s the average growth rate since the recovery began in 7/09. Looking to 2020, growth will benignly decline to 2%. Consumer spending remains critical as trade and corporate investment will be mildly negative, and government spending, just…