Everyone insisting America isn't up to managing the world’s No. 1 economy after the Covid-19 pandemic caused the highest joblessness since the Great Depression and biggest cost-of-living increase in 40 years should ask...
Personal income (excluding transfer receipts) in February rose 0.3% and is up 6.6% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) MoM was up 0.03% and was up 1.6% year-over-year.
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, shifted up to 43.8 in March from 43.6 in February, marking the seventh straight month in contraction territory. This reading comes in above the Investing.com forecast of 43.4.
With the release of this morning's report on February's personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.43% month-over-month change in disposable income comes to 0.16% when we adjust for inflation. This is a steep decline from last month's 2.00% nominal and 1.42% real change. The year-over-year metrics are 7.90% nominal and 2.76% real.
The accompanying chart is a way to visualize real GDP change since 2007 and uses stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics.
The third estimate for Q4 GDP came in at 2.6% a decrease from 3.2% for the Q3 third estimate. With a per-capita adjustment, the headline number is lower at 2.0%, a decrease from 2.7% for the Q3 headline number.
This morning's seasonally adjusted 198K new claims, up 7K from the previous week's revised figure, came in above the Investing.com forecast of 191K.
Charitable planning is an important topic to discuss with your clients, especially if they’re facing extraordinary taxable events this year. You can add value to your clients by sharing these tax-smart giving strategies for 2023.
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. According to the NAR, "Pending home sales grew in February for the third consecutive month."
With this morning's release of the January S&P Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 0.4% decrease month-over-month (MoM), higher than the Investing.com forecast of -0.5%, and a 2.6% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to -1.1% and the YoY was reduced to -4.8%.
A year into its fight against inflation, the Federal Reserve could — just maybe — be done raising its policy rate. History shows that monetary policy pauses mark great buying opportunities for US stocks, but there are several key caveats to bear in mind this time.
For millions of borrowers, student loan forgiveness will mean the difference between significant relief and ongoing payments. If you’re among them, the question is… what next?
The Conference Board released its Consumer Confidence Index ® this morning, with the headline number coming in at 104.2, an increase of 0.8 from the upwardly revised final reading of 103.4 in February. This month's reading is better than the Investing.com forecast of 101.0.
The Federal Housing Finance Agency (FHFA) has released its U.S. house price index (HPI) for January. U.S. house prices increased by 0.2% from the previous month. Year-over-year the index is up 5.3% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the real index is down 0.2% in January and down 0.3% year-over-year (seasonally adjusted).
Six of eight indexes on our world watch list posted gains through March 27, 2023. France's CAC 40 finished in the top spot with a YTD gain of 9.34%. Germany's DAXK finished second with a YTD gain of 8.33%, and Tokyo's Nikkei 225 moved to third with a YTD gain of 5.30%. India's BSE SENSEX finished last with a loss of 5.24% YTD.
The economic signals and a host of geopolitical risks confronting investors suggest that 2023 could be as challenging as 20022 for both stocks and bonds.
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for March. The latest general business activity index came in at -15.7, down 2.2 from last month. The general business activity index has been in contraction territory since May of last year. The 3-month moving average is up 1.5 this month to -12.5, its lowest since June 2022. All figures are seasonally adjusted.
The U.S. dollar remains the world’s top reserve currency for now, though its share of global central banks’ official holdings has slipped in the past 20 years. By contrast, the yuan’s share of official holdings has more than doubled since 2016.
Chief Economist Eugenio J. Alemán discusses current economic conditions.
The latest Underlying Inflation Gauge full data set for February is 4.8% while the prices-only measure is 3.9%. Current Headline CPI is now 6.0% and Core CPI is 5.5%.
The latest Kansas City Fed Manufacturing Survey composite index came in at 0, unchanged from last month's figure. The future outlook came in at 3, up 2 from last month.
This morning's release of the February new home sales from the Census Bureau came in at 640K, up 1.1% month-over-month from a revised 633K in January. This is below the Investing.com forecast of 650K however it is the highest amount of monthly sales in the last 6 months. and above the Investing.com forecast of 620K. The median home price is now at $438,200, up $11.7K from January on a nominal basis.
Silicon Valley Bank was a “vital cog” in the private market ecosystem, which leads to many questions—and opportunities—across the alternative investments landscape.
All eyes in the financial and economic world will be laser-focused Wednesday on the Federal Reserve as Chair Jerome Powell tries to balance his fight against inflation against a sudden banking crisis.
We have been reminding everyone that we believe we are unwinding a financial euphoria episode that Charlie Munger called the biggest of his career, “because of the totality of it.”
This morning's release of the February existing home sales showed that sales surged to a seasonally adjusted annual rate of 4.58 million units from the previous month's 4.00 million, ending the 12-month streak of monthly declines. The latest number represents a 14.5% month-over-month increase, its largest since July 2020 and well above the Investing.com forecast of 5%. With that being said, existing home sales are down 22.6% compared to one year ago.
Portfolio Manager Andy Acker explains why the healthcare sector could offer an attractive combination of defense and growth in today’s market.
Franklin Templeton Investment Solutions explores the shared macro concerns that set the stage for the recent banking crisis, its ripple effects on the broader economy and implications for multi-asset investing.
I've updated this series to include the February release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $48,172, down 8.2% from 50 years ago. Hourly earnings are below their all-time high after adjusting for inflation.
Implications of SVB and Credit Suisse on the European banking sector—check out highlights from our recent panel discussion with Kim Catechis, Investment Strategist with the Franklin Templeton Institute.
Month-over-month nominal retail sales in January were down 0.4% and up 5.4% YoY. However after adjusting for inflation, real retail sales decreased by 0.8% and were down 0.6% YoY.
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
The latest manufacturing index came in at -23.2, up 1.1 from last month's -24.3, marking the index's seventh negative reading in a row.. The three-month moving average is now at -18.8, down from last month and the lowest since June 2020. The six-month outlook was down 9.7 points to -8.0. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion.
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. The latest reading came in better than expected (40) at 44, up 2 from last month, and is the index's highest reading in the last six months.
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions dropped 18.8 points from last month to -24.6. This morning's reading was far below the Investing.com forecast of -8.0. This month's reading marks the fourth consecutive month in contraction territory.
The Census Bureau's Advance Retail Sales Report for February was released this morning. Headline sales came in slightly below forecast at -0.4% month-over-month. Core sales (ex Autos) came in at -0.1% month-over-month, in line with the forecast.
The morning's release of the February Producer Price Index (PPI) for final demand was at -0.1% month-over-month seasonally adjusted, down from last month's 0.3% increase. Core PPI (excluding food and energy) was at 0.0% month-over-month, down from last month's 0.4% increase. Both headline and core PPI came in lower than their respective Investing.com forecasts, with headline expectations at 0.3% and core expectations at 0.4%.
We are currently seeing some of the highest inflation rates since the second of the two recessions in the early 1980s. Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months.
I've updated our monthly workforceanalysis to include the latest employment report for February. The unemployment rate increased to 3.6%, and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 311K.
The headline number for February came in at 90.9, up 0.6 from the previous month, but still below the series average of 98.2. The index is at the 9th percentile in this series.
The Bureau of Labor Statistics released the February Consumer Price Index data this morning. The year-over-year Headline CPI came in as expected at 6.0%, down from 6.4% the previous month (n.s.a). Year-over-year Core CPI (ex Food and Energy) also came in as expected at 5.5%, down from 5.6% the previous month (n.s.a).
Let's take a close look at February's employment report numbers on Full and Part-Time Employment.
The latest monthly employment report showed a gain of 311,000 nonfarm jobs, which consists of a gain of 291,000 service-providing jobs and a gain of 20,000 goods-producing jobs.
If a picture is worth a thousand words, this will be the “longest” letter I’ve sent you in a while, as there are quite a few pictures. It may also be the most wide-ranging.
Like face recognition, artificial intelligence (AI), mRNA vaccines and other modern technology, Bitcoin is a key component of the ongoing, rapidly accelerating digital transformation.
Larry Culp is finally having a good year. General Electric Co. had been in nearly constant turmoil since Culp took over as chief executive officer with a turnaround mandate in 2018.
This commentary has been updated to include this morning's release of non-farm employment. February saw a 311,000 increase in total non-farm payrolls. The unemployment rate rose to 3.6%. The Investing.com forecast was for 205,000 jobs gained.
We believe municipal bonds boast several key factors that position them as an attractive asset class in general, but especially so when markets are volatile.
This is a couple months past its release, but the latest Fed balance sheet shows a total net worth for households and nonprofit organizations that is 149% above the 2009 trough. The nominal Q4 2022 net worth is down up 2.0% from the previous quarter and down 2.7% year-over-year.
While 2023 has started on shaky ground for the municipal bond market, there are reasons to be optimistic for more stability ahead, according to Jennifer Johnston, Franklin Templeton Fixed Income’s Director of Municipal Bond Research. She explains why California’s issues don’t reflect all states, and offers reasons for optimism.
The latest job openings and labor turnover summary (JOLTS) report, with data through January, is now available.
The U.S. international trade in goods and services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992 and details U.S. exports and imports of goods and services. The headline number of -$68.2B was better than the -68.9B Investing.com forecast, however it is the largest gap we have seen in the last 3 months.
Artificial intelligence will reshape how a lot of work gets done.
The February US services purchasing managers' index (PMI) conducted by S&P Global came in at 50.6 percent, notably up from 46.8 in January and just slightly higher than the Investing.com forecast of 50.5. This morning's reading moves the index into expansion territory after being in contraction for seven months.
The Institute of Supply Management (ISM) has now released its February services purchasing managers' index (PMI). The headline composite index is at 55.1 percent, down 0.1 from 55.2 last month. Today's number came in above the Investing.com forecast of 54.5 percent.
Here is the latest update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month.
"Travel on all roads and streets changed by -1.8% (-4.6 billion vehicle miles) for December 2022 as compared with December 2021. Travel for the month is estimated to be 256.4 billion vehicle miles." The 12-month moving average was down month-over-month by 2.87% and was up 0.9% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) dropped 2.9% month-over-month and was down 0.1% year-over-year.
The US Supreme Court’s conservative majority cast doubt on President Joe Biden’s plan to slash the student debt of more than 40 million people, imperiling one of his signature initiatives in a high-stakes showdown over presidential power.
In recent years we have witnessed a surge in sovereign bond defaults in emerging markets.
This morning the Institute for Supply Management published its monthly Manufacturing Report for February. The latest headline purchasing managers index (PMI) was 47.7, up 0.3 from the previous month and worse than the Investing.com forecast of 48.0. This marks the fourth consecutive month in contraction territory after a 29-month period of growth dating back to June 2020.
Strength in employment and inflation has caused markets to raise the implied terminal rate while still expecting the Fed to normalize policy – which is different from easing – in 2024.
The February S&P Global US Manufacturing PMI™ hit a 3-month high coming in at 47.3, up 0.4 from the final January figure, and slightly worse than the Investing.com forecast of 47.8. This marks the fourth consecutive month in contraction territory, a streak we have not seen since 2020.
Making the case for international value investing—thoughts from Templeton Global Equity Group on why now’s the time to consider expanding one’s investment horizons.
The credit cycle lies at the heart of our financial system.
Sound policymaking has helped India modernize and achieve robust economic growth, positioning it to become an increasingly important player on the world stage.
Federal Reserve officials like to call their decisions “data dependent.” Business leaders say it a little differently, often “data driven.” The point, in both cases, is something like: “We consider relevant data when making important decisions.”
The auto industry is navigating through shifting conditions in trade, policy, and preferences.
Engine No. 1’s latest exchange-traded fund will focus on companies seeking to bring their operations closer to home after the pandemic upended global supply chains.
Time out of school is still weighing on student performance.
Federal Reserve Bank of Richmond President Thomas Barkin said the central bank may need to raise interest rates to a higher level than previously anticipated should inflation keep running too fast for comfort.
This Super Bowl will also be remembered, I believe, as a major turning point in sports betting in the U.S. More than 50 million American adults are expected to bet on the game, the most ever and a remarkable 61% increase from last year.
The US government is exploring narrowly focused trade pacts on critical minerals with Japan and the UK, in addition to talks with the European Union, the latest salvo in its push to counter Chinese influence in key sectors, officials familiar with the matter said.
The Loomis Sayles Mortgage & Structured Finance Sector Team shares insights on consumers, real estate markets and more.
US workers are clearly feeling the strain of economic uncertainty, according to Franklin Templeton’s third annual “Voice of the American Worker” study.
Federal Reserve Bank of Atlanta President Raphael Bostic said January’s strong jobs report raises the possibility that the central bank will need to increase interest rates to a higher peak than policymakers had previously expected.
The greening of red-state America, well underway in the Sun Belt, is now accelerating in the Midwest.
These weekly letters, of which I’ve now written well over 1,000 (plus 7 books and multiple papers and articles), are generally about two broad topics: the economy and the financial markets. While related, these aren’t the same. Good news for one can be (and often is) bad news for the other.
At the conclusion of its inaugural policy meeting of 2023 today, the U.S. Federal Reserve (Fed) delivered a smaller, quarter-point rate hike, as widely expected by markets.
In 1965 I was studying for a degree in Engineering.
US market structure was back in the news recently with several stocks experiencing irregular price movements on the morning of January 24.
Inflation appears to have peaked, led by improvements in core goods prices and rate-sensitive sectors like housing.
Once-hated world stocks, bonds laced with interest-rate risk and even deadbeat crypto coins have just closed out a big new-year rally.
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau has now released its latest quarterly report with data through Q4 2022.
US Treasury Secretary Janet Yellen said persistently weak inflation is likely to return as a long-term challenge for the economy and policymakers once pandemic-era distortions behind the recent surge subside and prices cool.
The current debt ceiling debate in Congress is a great reminder that investors should always prepare for the unexpected and invest in companies that are durable enough to withstand a range of economic scenarios.
There’s a price to be paid for being early in investing even if you get the broader story right, as US stock market bears are learning the hard way.
The Biden administration is under pressure from Capitol Hill lawmakers and student debt advocates to develop contingency plans to cancel billions of dollars in student debt and to move forward quickly if the Supreme Court strikes down the administration’s initial executive action.
COVID-19: Coronavirus Coverage
Fed Critics Are Missing Some Important Context
Everyone insisting America isn't up to managing the world’s No. 1 economy after the Covid-19 pandemic caused the highest joblessness since the Great Depression and biggest cost-of-living increase in 40 years should ask...
The Big Four: Real Personal Income in February
Personal income (excluding transfer receipts) in February rose 0.3% and is up 6.6% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) MoM was up 0.03% and was up 1.6% year-over-year.
Chicago PMI Down Shifts Up in March, Better Than Expected
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, shifted up to 43.8 in March from 43.6 in February, marking the seventh straight month in contraction territory. This reading comes in above the Investing.com forecast of 43.4.
Real Disposable Income Per Capita Inches Up 0.16% in February
With the release of this morning's report on February's personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.43% month-over-month change in disposable income comes to 0.16% when we adjust for inflation. This is a steep decline from last month's 2.00% nominal and 1.42% real change. The year-over-year metrics are 7.90% nominal and 2.76% real.
An Inside Look at the GDP Q4 Third Estimate
The accompanying chart is a way to visualize real GDP change since 2007 and uses stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics.
Q4 Real GDP Per Capita at 2.0% Vs Q4 Real GDP at 2.6%
The third estimate for Q4 GDP came in at 2.6% a decrease from 3.2% for the Q3 third estimate. With a per-capita adjustment, the headline number is lower at 2.0%, a decrease from 2.7% for the Q3 headline number.
Weekly Unemployment Claims: Up 7K, Higher Than Expected
This morning's seasonally adjusted 198K new claims, up 7K from the previous week's revised figure, came in above the Investing.com forecast of 191K.
12 Tax-Smart Charitable Giving Tips for 2023
Charitable planning is an important topic to discuss with your clients, especially if they’re facing extraordinary taxable events this year. You can add value to your clients by sharing these tax-smart giving strategies for 2023.
Pending Home Sales Grew for Third Consecutive Month, Up 0.8% in February
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. According to the NAR, "Pending home sales grew in February for the third consecutive month."
S&P Case-Shiller Home Price Index Continued Decline in January
With this morning's release of the January S&P Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 0.4% decrease month-over-month (MoM), higher than the Investing.com forecast of -0.5%, and a 2.6% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to -1.1% and the YoY was reduced to -4.8%.
History Says to Buy the Fed Pause. Should You?
A year into its fight against inflation, the Federal Reserve could — just maybe — be done raising its policy rate. History shows that monetary policy pauses mark great buying opportunities for US stocks, but there are several key caveats to bear in mind this time.
The Supreme Court May Quash Biden's Student Loan Forgiveness: Here's What Borrowers Should Do
For millions of borrowers, student loan forgiveness will mean the difference between significant relief and ongoing payments. If you’re among them, the question is… what next?
Consumer Confidence Increased Slightly in March
The Conference Board released its Consumer Confidence Index ® this morning, with the headline number coming in at 104.2, an increase of 0.8 from the upwardly revised final reading of 103.4 in February. This month's reading is better than the Investing.com forecast of 101.0.
FHFA House Price Index Up 0.2% in January, Beats Forecast
The Federal Housing Finance Agency (FHFA) has released its U.S. house price index (HPI) for January. U.S. house prices increased by 0.2% from the previous month. Year-over-year the index is up 5.3% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the real index is down 0.2% in January and down 0.3% year-over-year (seasonally adjusted).
World Markets Update: March 27, 2023
Six of eight indexes on our world watch list posted gains through March 27, 2023. France's CAC 40 finished in the top spot with a YTD gain of 9.34%. Germany's DAXK finished second with a YTD gain of 8.33%, and Tokyo's Nikkei 225 moved to third with a YTD gain of 5.30%. India's BSE SENSEX finished last with a loss of 5.24% YTD.
First Quarter 2023 Economic Review and Forecast
The economic signals and a host of geopolitical risks confronting investors suggest that 2023 could be as challenging as 20022 for both stocks and bonds.
Dallas Fed Manufacturing: Business Conditions Continued to Worsen in March
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for March. The latest general business activity index came in at -15.7, down 2.2 from last month. The general business activity index has been in contraction territory since May of last year. The 3-month moving average is up 1.5 this month to -12.5, its lowest since June 2022. All figures are seasonally adjusted.
Is This The End Of The Petrodollar?
The U.S. dollar remains the world’s top reserve currency for now, though its share of global central banks’ official holdings has slipped in the past 20 years. By contrast, the yuan’s share of official holdings has more than doubled since 2016.
Growth in Real Money Supply is What is Important for Taming Inflation, and for the Fed
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Underlying Inflation Gauge: February Update
The latest Underlying Inflation Gauge full data set for February is 4.8% while the prices-only measure is 3.9%. Current Headline CPI is now 6.0% and Core CPI is 5.5%.
Kansas City Fed Manufacturing Survey: Activity Stayed Flat
The latest Kansas City Fed Manufacturing Survey composite index came in at 0, unchanged from last month's figure. The future outlook came in at 3, up 2 from last month.
New Home Sales Up for Third Straight Month
This morning's release of the February new home sales from the Census Bureau came in at 640K, up 1.1% month-over-month from a revised 633K in January. This is below the Investing.com forecast of 650K however it is the highest amount of monthly sales in the last 6 months. and above the Investing.com forecast of 620K. The median home price is now at $438,200, up $11.7K from January on a nominal basis.
Alternative Investments Outlook Post-SVB
Silicon Valley Bank was a “vital cog” in the private market ecosystem, which leads to many questions—and opportunities—across the alternative investments landscape.
Fed Caught Between Inflation and Bank Crisis
All eyes in the financial and economic world will be laser-focused Wednesday on the Federal Reserve as Chair Jerome Powell tries to balance his fight against inflation against a sudden banking crisis.
Funding Unprofitable Growth
We have been reminding everyone that we believe we are unwinding a financial euphoria episode that Charlie Munger called the biggest of his career, “because of the totality of it.”
Existing-Home Sales Surge in February, Ending 12-Month Streak of Declines
This morning's release of the February existing home sales showed that sales surged to a seasonally adjusted annual rate of 4.58 million units from the previous month's 4.00 million, ending the 12-month streak of monthly declines. The latest number represents a 14.5% month-over-month increase, its largest since July 2020 and well above the Investing.com forecast of 5%. With that being said, existing home sales are down 22.6% compared to one year ago.
Two Sides of Healthcare, One Strong Investment Case
Portfolio Manager Andy Acker explains why the healthcare sector could offer an attractive combination of defense and growth in today’s market.
A Multi-Asset Perspective on Recent Bank Turmoil: Don’t Lose Sight of the Macro Story
Franklin Templeton Investment Solutions explores the shared macro concerns that set the stage for the recent banking crisis, its ripple effects on the broader economy and implications for multi-asset investing.
Middle-Class Hourly Wages as of February 2023
I've updated this series to include the February release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $48,172, down 8.2% from 50 years ago. Hourly earnings are below their all-time high after adjusting for inflation.
European Banking Sector—Taking Stock After Silicon Valley Bank and Credit Suisse
Implications of SVB and Credit Suisse on the European banking sector—check out highlights from our recent panel discussion with Kim Catechis, Investment Strategist with the Franklin Templeton Institute.
The Big Four: February Real Retail Sales Down 0.8%
Month-over-month nominal retail sales in January were down 0.4% and up 5.4% YoY. However after adjusting for inflation, real retail sales decreased by 0.8% and were down 0.6% YoY.
Inside the Consumer Price Index: February 2023
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
Philly Fed Manufacturing Index: Activity Declines for Seventh Straight Month
The latest manufacturing index came in at -23.2, up 1.1 from last month's -24.3, marking the index's seventh negative reading in a row.. The three-month moving average is now at -18.8, down from last month and the lowest since June 2020. The six-month outlook was down 9.7 points to -8.0. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion.
NAHB Housing Market Index: Confidence Edges Higher but Future Outlook Uncertain
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. The latest reading came in better than expected (40) at 44, up 2 from last month, and is the index's highest reading in the last six months.
Empire State Manufacturing Survey: Contraction Continues in March
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions dropped 18.8 points from last month to -24.6. This morning's reading was far below the Investing.com forecast of -8.0. This month's reading marks the fourth consecutive month in contraction territory.
Retail Sales Dip 0.4% in February After Strong January
The Census Bureau's Advance Retail Sales Report for February was released this morning. Headline sales came in slightly below forecast at -0.4% month-over-month. Core sales (ex Autos) came in at -0.1% month-over-month, in line with the forecast.
Producer Price Index: February Headline at 4.6%, Down from January
The morning's release of the February Producer Price Index (PPI) for final demand was at -0.1% month-over-month seasonally adjusted, down from last month's 0.3% increase. Core PPI (excluding food and energy) was at 0.0% month-over-month, down from last month's 0.4% increase. Both headline and core PPI came in lower than their respective Investing.com forecasts, with headline expectations at 0.3% and core expectations at 0.4%.
February Inflation: The Components
We are currently seeing some of the highest inflation rates since the second of the two recessions in the early 1980s. Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months.
U.S. Workforce: February 2023 Update
I've updated our monthly workforceanalysis to include the latest employment report for February. The unemployment rate increased to 3.6%, and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 311K.
NFIB Small Business Survey: Expectations for Better Business Conditions Remain Low
The headline number for February came in at 90.9, up 0.6 from the previous month, but still below the series average of 98.2. The index is at the 9th percentile in this series.
Consumer Price Index: February Headline at 6.0%, Down from January
The Bureau of Labor Statistics released the February Consumer Price Index data this morning. The year-over-year Headline CPI came in as expected at 6.0%, down from 6.4% the previous month (n.s.a). Year-over-year Core CPI (ex Food and Energy) also came in as expected at 5.5%, down from 5.6% the previous month (n.s.a).
Full-time and Part-time Employment: A Deeper Look
Let's take a close look at February's employment report numbers on Full and Part-Time Employment.
February Employment: Services- versus Goods-Producing Jobs
The latest monthly employment report showed a gain of 311,000 nonfarm jobs, which consists of a gain of 291,000 service-providing jobs and a gain of 20,000 goods-producing jobs.
Monetary Cycle Versus Fiscal Cycle: What is the Difference?
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Thousand-Word Equivalents
If a picture is worth a thousand words, this will be the “longest” letter I’ve sent you in a while, as there are quite a few pictures. It may also be the most wide-ranging.
Bitcoin Is A Key Component Of The Great Digital Transformation
Like face recognition, artificial intelligence (AI), mRNA vaccines and other modern technology, Bitcoin is a key component of the ongoing, rapidly accelerating digital transformation.
GE Chief’s Bold Moves Are Finally Winning Wall Street Approval
Larry Culp is finally having a good year. General Electric Co. had been in nearly constant turmoil since Culp took over as chief executive officer with a turnaround mandate in 2018.
The Big Four Economic Indicators: February Employment
This commentary has been updated to include this morning's release of non-farm employment. February saw a 311,000 increase in total non-farm payrolls. The unemployment rate rose to 3.6%. The Investing.com forecast was for 205,000 jobs gained.
Municipal Bond Outlook 2023: Three Reasons for Optimism
We believe municipal bonds boast several key factors that position them as an attractive asset class in general, but especially so when markets are volatile.
Q4 2022 Household Net Worth: The "Real" Story
This is a couple months past its release, but the latest Fed balance sheet shows a total net worth for households and nonprofit organizations that is 149% above the 2009 trough. The nominal Q4 2022 net worth is down up 2.0% from the previous quarter and down 2.7% year-over-year.
Muni Bond Update: Credit Quality Still Looks Strong
While 2023 has started on shaky ground for the municipal bond market, there are reasons to be optimistic for more stability ahead, according to Jennifer Johnston, Franklin Templeton Fixed Income’s Director of Municipal Bond Research. She explains why California’s issues don’t reflect all states, and offers reasons for optimism.
January Job Openings & Labor Turnover
The latest job openings and labor turnover summary (JOLTS) report, with data through January, is now available.
January Trade Deficit Widens to $68.2B
The U.S. international trade in goods and services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992 and details U.S. exports and imports of goods and services. The headline number of -$68.2B was better than the -68.9B Investing.com forecast, however it is the largest gap we have seen in the last 3 months.
AI Arrives
Artificial intelligence will reshape how a lot of work gets done.
S&P Global Services PMI: Renewed Expansion in February
The February US services purchasing managers' index (PMI) conducted by S&P Global came in at 50.6 percent, notably up from 46.8 in January and just slightly higher than the Investing.com forecast of 50.5. This morning's reading moves the index into expansion territory after being in contraction for seven months.
ISM Services Expand in February
The Institute of Supply Management (ISM) has now released its February services purchasing managers' index (PMI). The headline composite index is at 55.1 percent, down 0.1 from 55.2 last month. Today's number came in above the Investing.com forecast of 54.5 percent.
P/E10: February 2023 Update
Here is the latest update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month.
America's Driving Habits as of December 2022
"Travel on all roads and streets changed by -1.8% (-4.6 billion vehicle miles) for December 2022 as compared with December 2021. Travel for the month is estimated to be 256.4 billion vehicle miles." The 12-month moving average was down month-over-month by 2.87% and was up 0.9% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) dropped 2.9% month-over-month and was down 0.1% year-over-year.
Supreme Court Signals It's Skeptical Biden's Student-Loan Plan Is Legal
The US Supreme Court’s conservative majority cast doubt on President Joe Biden’s plan to slash the student debt of more than 40 million people, imperiling one of his signature initiatives in a high-stakes showdown over presidential power.
The Many Faces of Sovereign Default
In recent years we have witnessed a surge in sovereign bond defaults in emerging markets.
ISM Manufacturing Index Contracts for Fourth Straight Month
This morning the Institute for Supply Management published its monthly Manufacturing Report for February. The latest headline purchasing managers index (PMI) was 47.7, up 0.3 from the previous month and worse than the Investing.com forecast of 48.0. This marks the fourth consecutive month in contraction territory after a 29-month period of growth dating back to June 2020.
Data Alters Market's Expectations for Peak Policy Rate But Not Outlook for Fed Cuts
Strength in employment and inflation has caused markets to raise the implied terminal rate while still expecting the Fed to normalize policy – which is different from easing – in 2024.
February S&P Global US Manufacturing PMI™: Softest Decline in 3 Months
The February S&P Global US Manufacturing PMI™ hit a 3-month high coming in at 47.3, up 0.4 from the final January figure, and slightly worse than the Investing.com forecast of 47.8. This marks the fourth consecutive month in contraction territory, a streak we have not seen since 2020.
International Equities: Poised for Recovery
Making the case for international value investing—thoughts from Templeton Global Equity Group on why now’s the time to consider expanding one’s investment horizons.
Income and Expenditures in January 2023
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Why The Credit Cycle Is Set To Deteriorate In 2023
The credit cycle lies at the heart of our financial system.
India at a Crossroads
Sound policymaking has helped India modernize and achieve robust economic growth, positioning it to become an increasingly important player on the world stage.
Adjustments Matter
Federal Reserve officials like to call their decisions “data dependent.” Business leaders say it a little differently, often “data driven.” The point, in both cases, is something like: “We consider relevant data when making important decisions.”
Driving Change
The auto industry is navigating through shifting conditions in trade, policy, and preferences.
Activist Investor Engine No. 1 Launches Supply Chain ETF
Engine No. 1’s latest exchange-traded fund will focus on companies seeking to bring their operations closer to home after the pandemic upended global supply chains.
The Pandemic Did A Number On Schoolkids
Time out of school is still weighing on student performance.
Barkin Says Fed May Extend Rate Hikes If Inflation Persists
Federal Reserve Bank of Richmond President Thomas Barkin said the central bank may need to raise interest rates to a higher level than previously anticipated should inflation keep running too fast for comfort.
Is a Recession This Year Unavoidable?
Chief Economist Eugenio J. Alemán discusses current economic conditions.
The Real Reason Why 50 Million Americans Will Be Betting On The Super Bowl
This Super Bowl will also be remembered, I believe, as a major turning point in sports betting in the U.S. More than 50 million American adults are expected to bet on the game, the most ever and a remarkable 61% increase from last year.
US Seeks Critical-Mineral Pacts With Japan, UK to Curb China
The US government is exploring narrowly focused trade pacts on critical minerals with Japan and the UK, in addition to talks with the European Union, the latest salvo in its push to counter Chinese influence in key sectors, officials familiar with the matter said.
Mortgage & Structured Finance Outlook: Where We See the Value
The Loomis Sayles Mortgage & Structured Finance Sector Team shares insights on consumers, real estate markets and more.
Financial Independence Remains a Top Priority Despite Employee Feelings of Financial Anxiety
US workers are clearly feeling the strain of economic uncertainty, according to Franklin Templeton’s third annual “Voice of the American Worker” study.
Fed's Bostic Says Higher Peak Rate on Table After Jobs Blowout
Federal Reserve Bank of Atlanta President Raphael Bostic said January’s strong jobs report raises the possibility that the central bank will need to increase interest rates to a higher peak than policymakers had previously expected.
Solar Panels Are the Midwest's New Cash Crop as Green Energy Booms
The greening of red-state America, well underway in the Sun Belt, is now accelerating in the Midwest.
A Muddle-Through Market, for Now
These weekly letters, of which I’ve now written well over 1,000 (plus 7 books and multiple papers and articles), are generally about two broad topics: the economy and the financial markets. While related, these aren’t the same. Good news for one can be (and often is) bad news for the other.
February Fed Meeting: Tough Talk for a Smaller Hike
At the conclusion of its inaugural policy meeting of 2023 today, the U.S. Federal Reserve (Fed) delivered a smaller, quarter-point rate hike, as widely expected by markets.
A Walk Down Memory Lane
In 1965 I was studying for a degree in Engineering.
Don’t Call This a Flash Crash!
US market structure was back in the news recently with several stocks experiencing irregular price movements on the morning of January 24.
Where is the Recession?
Inflation appears to have peaked, led by improvements in core goods prices and rate-sensitive sectors like housing.
Wall Street's Feel-Good Start to 2023 Sets Up Perilous Fed Day
Once-hated world stocks, bonds laced with interest-rate risk and even deadbeat crypto coins have just closed out a big new-year rally.
Home Ownership Rate: 65.9% in Q4 2022
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau has now released its latest quarterly report with data through Q4 2022.
Yellen Sees Low Inflation as More Likely Long-Term Challenge
US Treasury Secretary Janet Yellen said persistently weak inflation is likely to return as a long-term challenge for the economy and policymakers once pandemic-era distortions behind the recent surge subside and prices cool.
Elephant in the Room
The current debt ceiling debate in Congress is a great reminder that investors should always prepare for the unexpected and invest in companies that are durable enough to withstand a range of economic scenarios.
GDP and Jobs Show the Stock Market Bears Are Still Early
There’s a price to be paid for being early in investing even if you get the broader story right, as US stock market bears are learning the hard way.
White House Under Pressure to Develop a 'Plan B' on Student Debt
The Biden administration is under pressure from Capitol Hill lawmakers and student debt advocates to develop contingency plans to cancel billions of dollars in student debt and to move forward quickly if the Supreme Court strikes down the administration’s initial executive action.