Tag Archives: Recession

It’s a palpable impatience. Having learned absolutely nothing from the most recent German example, there’s this pervasive belief that if the economy hasn’t fallen apart by now it must be going the other way. The right way. Those are the only two options for mainstream analysis (which means it isn’t analysis). You can see it in how everything is framed. When first presented with this “unexpected” globally synchronized downturn early on in 2019 (they ignored all the...

The Bureau of Labor Statistics (BLS) has begun the process of updating its annual benchmarks. Actually, the process began last year and what’s happening now is that the government is releasing its findings to the public. Up first is the Household Survey, the less-watched, more volatile measure which comes at employment from the other direction. As the name implies, the BLS asks households who in them is working whereas the more closely scrutinized Establishment...

Since I advertised the release last week, here’s Mexico’s update to Industrial Production in November 2019. The level of production was estimated to have fallen by 1.8% from November 2018. It was up marginally on a seasonally-adjusted basis from its low in October. That doesn’t sound like much, -1.8%, but apart from recent months this would’ve been the third worst result since 2009. Mexico has rarely experienced that kind of seemingly mild contraction. It signals...

It wasn’t actually Keynes who coined the term “pump priming”, though he became famous largely for advocating for it. Instead, it was Herbert Hoover, of all people, who began using it to describe (or try to) his Reconstruction Finance Corporation. Hardly the do-nothing Roosevelt accused Hoover of being, as President, FDR’s predecessor was the most aggressive in American history to that point, economically speaking. Roosevelt just took it a step (or seven) further....

Eurostat confirmed earlier today that Europe has so far avoided recession. At least, it hasn’t experienced what Economists call a cyclical peak. During the third quarter of 2019, Real GDP expanded by a thoroughly unimpressive +0.235% (Q/Q). This was a slight acceleration from a revised +0.185% the quarter before. The real question, though, is whether the business cycle approach means anything in this day and age. I don’t think it does, and that’s a big part of why...

Back in April, while she was quietly jockeying to make sure her name was placed at the top of the list to succeed Mario Draghi at the ECB, Christine Lagarde detoured into the topic of central bank independence. At a joint press conference held with the Governor of the Reserve Bank of South Africa, Lesetja Kganyago, as the Managing Director of the IMF Lagarde was asked specifically about President Trump’s habit of tweeting disdain in the direction of the Federal...

Even though it was a stunning turn of events, the move was widely celebrated. The Federal Reserve’s Open Market Committee, the FOMC, hadn’t been scheduled to meet until the end of that month. And yet, Alan Greenspan didn’t want to wait. The “maestro”, still at the height of his reputation, was being pressured to live up to it. The Fed had begun to cut rates. In Austin, Texas, where President-elect Bush and many prominent business leaders were gathered, the news...

There’s a couple of different ways that Unit Labor Costs can rise. Or even surge. The first is the good way, the one we all want to see because it is consistent with the idea of an economy that is actually booming. If workers have become truly scarce as macro forces sustain actual growth such that all labor market slack is absorbed, then businesses have to compete for them bidding up the price of marginal labor. This is, of course, the exact scenario we’ve been...

Better-than-expected is the new strong. Even I’m amazed at the satisfaction being taken with October’s payroll numbers. While you never focus too much on one monthly estimate, this time it might be time to do so. But not for those other reasons. Sure, GM caused some disruption and the Census is winding down, both putting everyone on edge. The whisper numbers were low double digits, maybe even a negative headline estimate. Markets had been riding pure pessimism...

In early September, the Institute for Supply Management (ISM) released figures for its non-manufacturing PMI that calmed nervous markets. A few weeks before anyone would start talking about repo, repo operations, and not-QE asset purchases, recession and slowdown fears were already prevalent. It hadn’t been a very good summer to that end, the promised second half rebound failing to materialize being more and more replaced by central banker backpedaling here as well...