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Hale Stewart: Bonddad Blog

The Bonddad Blog is authored by Hale Stewart, a financial advisor. His blog publishes an invaluable weekly economic review on the Bond Market, International Economics, and Equity and Economics. These links along with his highly detailed review of economic trends makes this one of the top economics blogs

August retail sales confirm healthy consumer sector

 - by New Deal democrat Retail sales are one of my favorite indicators, because in real terms they can tell us so much about the present, near term forecast, and longer term forecast for the economy. This morning retail sales for August were reported up +0.4%, and July, which was already very good at +0.7%,  was revised upward by another +0.1% as well. Since consumer inflation increased by +0.4% over that two month period, real retail sales have risen +0.7% in the past two months. As a...

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Real average and aggregate wage growth for August

 - by New Deal democrat Now that we have the August inflation reading, let’s take a look at real wage growth. First of all, nominal average hourly wages in June increased a strong +0.5%, while consumer prices increased +0.1%, meaning real average hourly wages for non-managerial personnel increased +0.4%. This translates into real wages of 97.5% of their all time high in January 1973, a new high following revisions to prior months: On a YoY basis, real average wages were up +1.7%,...

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An update on forecasts

 - by New Deal democratI have a new post up at Seeking Alpha, describing the order in which data has tended to deteriorate before consumer-led recessions. A few conditions have been met; most others have not.I have previously written that if a recession is in the works over the next few quarters, it is more likely to be a producer-led recession, a la 2001. In that regard, a few weeks ago I said that Q2 corporate profits would be a crucial report.Well, they were reported a couple of weeks...

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July JOLTS report: m/m improvement, but slowing trend

 - by New Deal democratThis morning’s JOLTS report for July was in general surprisingly positive on a monthly basis, but continued to show a slowing trend. To review, because this series is only 20 years old, we only have one full business cycle to compare. During the 2000s expansion: Hires peaked first, from December 2004 through September 2005 Quits peaked next, in September 2005 Layoffs and Discharges peaked next, from October 2005 through September 2006 Openings peaked last, in...

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Scenes from the August jobs report

 - by New Deal democrat The August jobs report was the mirror image of most earlier reports this year: a lackluster Establishment report but a strong Household report. Let’s take a look.By now the fact that there has been a jobs slowdown is pretty well established. In the last 7 months, only 964,000 jobs have been added, an average of 138,000 per month. If we subtract this month’s temporary census hiring of 25,000, those numbers drop to 939,000 and 134,000, respectively: And keep in mind...

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Weekly Indicators for September 2 – 6 at Seeking Alpha

 - by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.The nowcast and the long term forecast have been pretty stable, but the short term forecast has been volatile recently - and the monthly series (slightly negative) vs. the weekly data (more positive) are not in sync.This is likely because there is much more monthly data (usually from the government) than weekly data (more often from private sources) about manufacturing.

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August jobs report: for once, the underwhelming headline masked very good internals

 - by New Deal democrat HEADLINES:  +130,000 jobs added (+105,000 ex-Census) U3 unemployment rate unchanged at 3.7% U6 underemployment rate rose 0.2% to 7.2% Leading employment indicators of a slowdown or recession I am highlighting these because many leading indicators overall strongly suggest that an employment slowdown is coming. The following more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were positive. the average...

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One marker of initial jobless claims turns (slightly) negative

 - by New Deal democrat I’ve been monitoring initial jobless claims closely for the past several months, to see if there are any signs of stress. This is because the long leading indicators were negative one year ago, and many - but not a majority - of the short leading indicators have recently turned negative as well. So I am on “recession watch.” But no recession is going to begin unless and until layoffs increase. To reiterate, my two thresholds are:1. If the four week average on...

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Two sharply contrasting reports on the economy to start September

 - by New Deal democrat We got two contrasting views of the economy this morning.First, the good news: residential construction spending increased in July. Below I show it in comparison with single family permits: Typically construction follows permits. In the past few years, it has been almost coincident with permits. This is more good news for the important and leading housing sector, indicating that the decline that started in early 2018 has ended. With the continued recent further...

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The Passive-Aggressive Investor for the Week of August 26-30

Before starting please note that I am not the reader's investment advisor or lawyer.  This information is not meant for a specific individual.  Please read and then consult with your adviser.  This is not investment advice for any specific person. Let's start with a simple question: where are we in the economic cycle?  We're a lot closer to the end of the latest expansion.  I've got a 25% recession probability in the next 6-12 months, based on the yield curve and softness in several business...

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