Wednesday , July 17 2019
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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

June consumption was strong, while production was weak

 - by New Deal democrat This morning’s retail sales and industrial production releases for June are consistent with my take that the consumer sector of the economy is doing OK, while the production sector remains in trouble. Let’s start with retail sales.  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 June were reported up...

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WARNING: another “debt ceiling debacle” is looming, and could cause nearly immediate recession

 - by New Deal democrat It’s time to start to get seriously worried about another “debt ceiling debacle.” In 2011, the GOP refused to authorize a “clean” debt ceiling hike. The hike in the debt ceiling, for those who may not know, is necessary for the US government to pay debts that *it has already incurred.* In 2011, as a result of the impasse, US creditworthiness was downgraded from AAA to AA. Consumer confidence plummeted: Note the next largest spike downward occurred during the...

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Real average and aggregate wages improved in June

- by New Deal democrat Now that we have the June inflation reading, let’s finish out our week focusing on the labor market. First of all, nominal average hourly wages in June increased +0.2%, while consumer prices increased +0.1%, meaning real average hourly wages for non-managerial personnel increased +0.1%. Together with upward revisions to prior months, this brings real wages up to 97.2% of their all time high in January 1973: On a YoY basis, real average wages were up...

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Initial claims positive to start July, but trend in continuing claims the weakest in 9 years

 - by New Deal democrat I have started to monitor initial jobless claims to see if there are any signs of stress.My two thresholds are:1. If the four week average on claims is more than 10% above its expansion low.2. If the YoY% change in the monthly average turns higher.Here’s this week’s update. Initial jobless claims last week were 209,000. This is in the lower part of its range for the past 18 months. As of this week, the four week average is 9.2% above its recent low, and at...

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Using long term unemployment claims as confirmation for initial claims

 - by New Deal democratIn the last few months, I’ve been paying extra attention to the weekly reports of initial jobless claims. Today I want to compare them to long-term claims (15 weeks or over) for unemployment benefits. Way back about a decade ago, one of the occasional co-bloggers here was Invictus, who personally knew and subsequently was scooped up by Barry Ritholtz. Well, he still writes, and his Twitter feed is worth checking out.  So anyway, last week he tweeted this:...

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May JOLTS report is weak, consistent with last month’s weak jobs report

 - by New Deal democratThe jobs report one month ago was poor, so as expected the JOLTS report for May, released this morning, followed suit. 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 April 2007  as...

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Scenes from the June employment report

 - by New Deal democratAs I (and everyone else) wrote on Friday, the establishment portion of the June jobs report was very good. On closer examination, though, the leading components of the report continued to show some weakness. To begin with, for months I’ve been following manufacturing, residential construction, and temporary employment as the leading sectors. As the below graph of the past 18 months shows, all were positive in June: But if you compare each bar (blue, red,...

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