Wednesday , May 18 2022
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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

On the self-government of prehistorical human settlements, whether empire-sized Republics can long survive, and the failure of judicial supremacy as a bulwark

 - by New Deal democrat Can an Empire-sized Republic long survive? This was the issue I pondered after Donald Trump was elected President in 2016. Once a country gets big enough, do elected officials ultimately fail, and people inevitably turn to an autocrat to lead them? That led me on a journey reading the histories of all of the larger Republics in human history, from Rome through Venice, Genoa, Florence, the Swiss Confederation, the Dutch Republic, and the Glorious Revolution that...

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Weekly Indicators for May 2 – 6 at Seeking Alpha

 - by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.Over the past few months, indicators across all timeframes have deteriorated. With increasing interest rates, and another Fed rate hike, that trend continued, and spread to credit conditions in a significant way.As usual, clicking over and reading will bring you up to the virtual moment, and will bring me some lunch money.

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April jobs report: strong Establishment survey, very weak Household survey (UPDATED)

 - by New Deal democratI got a late start on this report today. I’ll add a much more detail shortly, but for now, be advised in summary that while the establishment report was strong, with mainly positive internals, the household report was very weak, with some very weak, albeit mainly still positive, internals.To be continued . . . ——-UPDATE:Just as one month ago, I was most interested in three main issues:1. Is the pace of job growth beginning to decelerate?  (Not in the establishment...

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New jobless claims: a possible reversal with a slight rising trend

 - by New Deal democratInitial jobless claims rose 19,000 to 200,000, continuing above the recent 50+ year low of 166,000 set in March. The 4 week average also rose by 8,000 to 188,000, compared with the all-time low of 170,500 set four weeks ago. On the other hand, continuing claims declined -19,000 to 1,384,000, yet another new 50 year low (but still well above their 1968 all-time low of 988,000):The “job openings” component of the March JOLTS report released on Tuesday, indicated that...

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The impact of supply constraints on the US economy in 3 easy graphs

 - by New Deal democratThe two most important purchases ever made by most consumers are (1) their houses, followed by (2) their motor vehicles. Indeed, according to Prof. Edward Leamer‘s forecasting model, ever since the end of World War 2 almost all American recessions have been preceded by, first of all, a decline in new home purchases about 6-7 quarters before, followed by a decline in the purchase of new motor vehicles about 9-12 months before.By all reasonable accounts, the US economy...

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March JOLTS report: the game of musical chairs in the jobs market intensifies to all-time highs

 - by New Deal democratIn March, as this morning’s Census Bureau JOLTS report shows, the game of musical job chairs in the jobs market has actually intensified to all-time levels. Specifically, both job openings and quits made all-time highs, and total separations during their entire 20 year history were only higher in March and April 2020.As a refresher, some months ago I introduced the idea that the jobs market was like a game similar to musical chairs, where employers added or took away...

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Manufacturing and construction start out the month with positive prints

 - by New Deal democratAs per usual, the new month starts with updates on manufacturing and construction.The ISM manufacturing index, and especially its new orders subindex, is an important short leading indicator for the production sector. This remained positive, but there has been a definite slowing in the past two months.In April the index declined from 57.1 to 55.4, and the new orders subindex also declined from 53.8 to 53.5, the lowest reading since 2020. As noted above, these remain...

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Weekly Indicators for April 25 – 29 at Seeking Alpha

 - by New Deal democratMy Weekly Indicators post is up at Seeking Alpha.Conditions have been deteriorating for awhile. This week, for the first time, real M2 and at least one credit condition reading contributed to that deterioration in the long leading forecast, enough to make a significant difference.To get brought up to speed on the potential implications, click on over and read the post. As usual, doing so will also reward me just a little bit for the efforts I put in to obtaining and...

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Lackluster spending, a decline in real income and savings in March; when the house price spiral turns, consumers are in real trouble

 - by New Deal democratIn March nominal personal income rose 0.5%, and spending rose 1.1%. But since the personal consumption deflator, i.e., the relevant measure of inflation, rose 0.9%, real income declined -0.4%, and real personal spending rose only +0.2%.While both real income and spending are well above their pre-pandemic levels, I have stopped comparing them with that, but instead with their level after last winter’s round of stimulus. Accordingly, the below graph is normed to 100 as...

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Q1 GDP negative; but more importantly, two of three long leading indicators have deteriorated

 - by New Deal democratFirst things first: yes, it was a negative GDP print. No, it doesn’t necessarily mean recession. I’ve been expecting weakness to show up by now ever since last summer; so here it is.But the big culprits were non-core items. Personal consumption expenditures, even adjusted for inflation, were positive. The three big negatives were a big decline in exports vs. imports, followed in about equal measure by a decline in inventories and a downturn in defense production by the...

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