Last Week’s Data
Each week I break down events into good and bad. Often there is “ugly” and on rare occasion something really good. My working definition of “good” has two components:
- The news is market-friendly. Our personal policy preferences are not relevant for this test. And especially — no politics.
- It is better than expectations.
The Good
This was a pretty good week for economic data – with one very important exception.
- The technical picture is a bit more bullish. See Charles Kirk for the full story and what to watch for this week. Our condolences go to Charles and his family on the loss of his uncle. Everyone missed his regular weekly chart show updates (small subscription required, and well worth it). We also congratulate Charles on thetenth anniversary of his blog – only one indication of how many people he has helped.
- Vehicle sales topped the 16 million annualized rate. Ed Yardeni calls it the “second recovery” because of pent-up demand for housing and vehicles. One special indicator is the Ford F150 since it also provides some insight into small business and construction activity. Here is one chart from Bespoke Investment Group, showing that YTD sales are the highest since 2006. Check out the full post for another chart and further analysis:
- Rail traffic is at a five-year high. Todd Sullivan provides both charts and analysis. He observes, “When you couple this data withrecent auto and housing data, you have a recipe for increasing GDP growth for Q4.”
- US Oil consumption is lower because gas mileage is better. See the excellent article and many charts from James Hamilton.
- Health care prices seem to be stabilizing. Check out Eddy Elbenbein’s “most important economic chart.”
- The ISM services index solidly beat expectations. Doug Short hascharts and analysis.
- ISM manufacturing was stronger than expected. Steven Hansen provides an in-depth analysis of how the last few months have reversed the trend from mid-2011.
The Bad
There was some bad news, and the worst was the most important.
- Emerging markets currency losses and capital outflows. The G20 sympathizes but offers no help. (Via the Council on Foreign Relations). See also the link to commentaryfrom the Fed’s Jackson Hold meeting. (Contra on Fed Causation – Patrick Zweifel at the FT).
- Investor sentiment became a little more bullish, a contrarian indicator via Bespoke.
- The employment report was weaker than expected on all fronts. The WSJ summarizes the bad news.
- Payroll job growth was lower than expected, and prior months were revised lower.
- The reduction in the unemployment rate is illusory, based upon lower labor force participation.
- The weak report continues the uncertainty about Fed policy, and the market hates uncertainty.
- The sluggish growth is just good enough to meet the Fed’s rough guidelines for the start of tapering.
- John Hilsenrath calls it a “cliffhanger.”
- Calculated Risk provides the four charts to watchto forecast changes in Fed policy.
The Ugly
Everything about civil wars and military actions is ugly, but poison gas is yet another dimension. As part of the campaign to convince the public, the Senate Intelligence Committee has posted videos of victims. This is very, very tough to watch. And there are no easy answers to controlling these weapons.
Click below to read more .
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