We got another bout of strong data today.
Initial claims came in well below expectations.
And housing starts came in well above expectations. Housing is the primary bullish tailwind for the US economy, so this is particularly gratifying.
That being said, the economy is not growing blazing fast just yet.
In a note out this morning, Goldman’s Shuyan Wu presents a note titled A Roadmap For Slow Growth In Q1.
Goldman expects growth of 1.5%, and [...]
The Swiss economy shrank slightly in the second quarter in its first contraction in nine months, data showed on Tuesday, as the crisis in the neighbouring eurozone hit exports of services even as private and public consumption stayed healthy.
The figures supported the case for the Swiss National Bank to maintain the 1.20 per euro cap on the franc it imposed a year ago to ward off a recession as investors [...]
Far from making the outlook clear, last week’s somewhat better-than-expected jobs report appears to have muddied the outlook on Wall Street for what Ben Bernanke and the Federal Reserve will do next.
None of the data meaningfully changed the growth forecast. The government reported 163,000 jobs created in July, about 60,000 more than forecast, but the unemployment (explain this) rate ticked up to 8.3 percent from 8.2 percent.
Add up all the other data from the [...]
From Pragmatic Capitalism:
Here’s a nice round-up of opinions from the analyst community on whether or not there will be QE3 this week. I’m really torn here.
The Fed seems to be signaling that they’re more likely to act, but the recent data still isn’t totally consistent with more Fed action. Most importantly, core inflation is still above 2% and GDP, while weak, was better than expected last week…
More via the WSJ…
–J.P. MORGAN: [...]
Dark financial and economic clouds are, it seems, rolling in from every direction: the euro zone, the United States, China and elsewhere. The global economy in 2013 could be a very difficult environment in which to find shelter.
For starters, the euro zone crisis is worsening, as the euro remains too strong, front-loaded fiscal austerity deepens recession in many member countries, and a credit crunch in the periphery and high [...]
Zarathustra W., Also Sprach Analyst
Looking at the latest data, media reports and what the government is doing, it might not be too far fetched to say that China is probably already in a so-called hard landing, if that is defined as sub-7% growth. In fact, depending how you look at the GDP growth figure, the annualised growth rate for the first quarter of 2012 was a mere 7.4% with the reported seasonally adjusted quarter-on-quarter growth rate at [...]
Nothing that we haven’t said already many times, but always good to hear someone, in this case SocGen’s Albert Edwards, observe what is patently obvious – namely that the start of every year now sends a consistently wrong signal that the economy is improving due to seasonal adjustments that no longer are applicable in the New Normal. This coupled with the liquidity boost that takes places just prior to each and every [...]
“A 30-50 year virtuous cycle of credit expansion which has produced outsize paranormal returns for financial assets—-bonds, stocks, real estate and commodities alike—-is now deleveraging because of excessive risk and the price of money at the zero-bound. We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time.”
This quote from Bill Gross’s February comment for Pimco neatly summarizes in one sentence [...]
Spain sells Treasury bills, yields jump
Spain Pays More to Borrow Than Greece as Rajoy Appeals to Europe
France’s AAA Status in Tatters as Yields Surge: Euro Credit
Spain demands bond price switch
ECB Urged To Set Ceiling For Sovereign Bond Yields (George Soros)
Italy banks face funding lockout as bonds trade at junk levels
Wash. governor proposes temp sales tax increase
NFTA plans to lay off 20% of transit police force
Detroit City Council’s plan: Increase income [...]
Alarm bells were sounded over prospects for the British economy after growth in Britain’s dominant services sector slowed last month at its fastest pace since the 2001 foot and mouth crisis.
Paul Smith, senior economist at survey compiler Markit, said there can be little doubt that the underlying growth profile of the services sector has weakened in recent months
The decline in growth increased [...]
By Jeffry Bartash
WASHINGTON (MarketWatch) – The U.S. economy grew 1.0% in the second quarter, down from an original estimate of 1.3%, the Commerce Department said Friday. The decline stemmed mainly from slower export growth and less restocking of inventories. Economists surveyed by MarketWatch predicted GDP would be revised down to 1.0% on a seasonally adjusted basis. The increase in exports was lowered to 3.1% [...]
by Phoenix Capital Research
Let’s consider the belief that Germany and the ECB might solve Europe’s debt problems.
For starters, this argument is absurd simply on a common-sense basis. Greece first asked for a bailout in June 2010. It’s since asked for an extension on this bailout AND a second bailout… all within a 14-month period. The fact this has occurred in such a brief period of time [...]
By William L. Watts
FRANKFURT (MarketWatch) — Economists at J.P. Morgan on Friday further cut estimates for U.S. economic growth and warned that recession risks are “clearly elevated.” While the outlook for third-quarter growth looks only “moderately softer” than previously projected, the economists, in a research note, said they have slashed the outlook for fourth-quarter growth to 1% from a previous projection of 2.5%. They [...]
Miami Declares “Financial Urgency”, Seeks Cuts From Unions
Spain’s Economic Growth Slows in Second Quarter Amid Austerity Measures
Govts debt crossed $41 trillion globally in 2010
High pressure on Sarkozy-Merkel euro zone talks
German Second-Quarter Growth Almost Stalls as GDP Rises 0.1%
European Economy Slows More Than Forecast as Debt Crisis Saps German Might
Import Prices in U.S. Rise 0.3%, Led by Gains in Costs of Fuel, Clothing (“Compared with a year earlier, import prices [...]
WASHINGTON (AP) — The economy likely grew in the first half of the year at the slowest pace since the recession ended, and the second half isn’t looking much better.
Weak consumer spending, dismal hiring and cuts in government spending likely held back growth in the April-June quarter. The government will report on second-quarter growth on Friday.
Economists forecast the economy expanded [...]
Here is the first official Q3 GDP downgrade, courtesy of JPM’s Michael Feroli. We fully expect every other clueless Wall Street lemming to follow suit in minutes.
Read em and weep:
We are revising down our projection for the growth rate of real GDP in Q3 from 3.0% to 2.5%. Obviously there’s not a whole lot we know right now about third quarter growth, but one thing we [...]
Bernanke Testifies to Congress on U.S. Monetary Policy
“Markets have to deal with sources of worries across multiple time zones,” said Gijsels in an interview with CNBC.com on Thursday, reminding that President Barack Obama walked out of a meeting with Congressional leaders about raising the debt limit.
While Gijsels believes the talks will end in a deal, he said the brinkmanship adds to the list of [...]
We have trimmed our current quarter growth estimate further based on the most recent economic data which showed higher inflation in the current quarter as well as preliminary evidence that the soft patch is extending into June. The May consumer price index topped expectations in both the headline (+0.2% vs. +0.4% previously) and core (+0.3% vs. +0.2%). While CPI energy declined (-1.0% vs. +2.2%) for [...]
The US economy was supposed to be in bloom by late spring, but it is hardly growing at all. Expectations for second-quarter growth are not much better than the measly 1.8 per cent annualised rate of the first quarter. That is not nearly fast enough to reduce America’s ferociously high level of unemployment. The labour department will tell us on Friday whether the jobs situation [...]
Full text: “We are revising down our outlook for the annual growth rate of real GDP in Q2 from 3.0% to 2.5%. The main factor behind our revision is weaker output of the motor vehicle sector. Based on industry data we project that real output in this sector will decline at around a 20% annual rate, which would subtract 0.5%-point from GDP growth. From an [...]
That means that more Americans think the country is in a Depression, let alone recession, than growing. Cue crickets and a Bernanke press conference where he discusses alien abductions and 8 toed mutant Madagascar lemurs.
Said otherwise, a combined 71% believe the economy is deteriorating two years after the stock market more than doubled. That can’t be right…
The health of the U.S. economy is expected to be a [...]
WASHINGTON (Reuters) – Economic growth braked sharply in the first quarter as higher food and gasoline prices dampened consumer spending and sent inflation rising at its fastest pace in 2-1/2 years.
Another report on Thursday showed a surprise jump in the number of Americans claiming unemployment benefits last week, which could cast a shadow on expectations for a significant pick-up in output in the second [...]
Quake Damage at Texas Instruments Plant Affects Income By THE ASSOCIATED PRESS DALLAS (AP) — The chip maker Texas Instruments said Monday that production setbacks linked to the March 11 earthquake and tsunami in Japan curbed its first-quarter net income and would cut into second-quarter growth. Richard K. Templeton, the Texas Instruments chief executive, said that the quarter started strong, but the Japan earthquake [...]
(Reuters) – The U.S. economy appears to be running dangerously close to stall speed, and the rest of the world may not have enough oomph to compensate.
At the start of 2011, growth looked solid. The U.S. unemployment rate was finally dropping, consumers were in a spending mood, and economists were busily upgrading first-quarter growth projections to the range of 4 percent.
Those forecasts are [...]
Tomorrow we’ll get the Advance Monthly Retail Trade Report for March from the Census Bureau. Shortly thereafter I’ll post my revised retail sales charts. Meanwhile, I’ve updated my Consumer Metrics Institute (CMI) charts through the latest data. The CMI Daily Growth Index is retesting the lows of last October. The Institute’s April 10 commentary, Retail Sales and Credit Expansions, may help to explain [...]
From Bank of America
Trimming 1Q GDP
Our tracking model is pointing to ever weaker Q1 GDP growth. In the past week, weak construction and consumption data added to the bad news. In nominal terms consumption increased 0.7% in February, but with the deflator up 0.4%, that implied a modest 0.3% real gain. Moreover, base effects are hurting the quarter: weak growth in December and January [...]
And so the sunset of the QE2 inspired Golden Age begins: From JPM’s Michael Ferolli: “We are revising down our projection for the annual growth rate of real GDP in Q1 from 4.0% to 3.5%. Prior to this week, first quarter growth had already been tracking a little soft relative to our forecast. In particular, consumers stumbled a bit to start the year, and [...]