Category Archives: Economic Analysis

Employment situation: Still not great, but better

Nonfarm payrolls expanded by 209,000 in July while the numbers for June and May were revised up a net 15,000. The unemployment rate inched a bit higher to 6.2%. Payrolls made tepid gains across most industries. Average hourly earnings, a … Continue reading

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Argentina’s default—another symptom of deeper problems

After failing to reach agreement with creditors yesterday, Argentina defaulted on bonds it restructured after its previous default in 2001. Although Argentina deposited interest payments it owed with its trustee, a ruling by a U.S. judge prevented the trustee from … Continue reading

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GDP’s big bounce

Gross domestic product (GDP) grew 4% on a seasonally adjusted and annualized basis from the first quarter. The first quarter’s estimate was revised from a 2.9% contraction to a 2.1% contraction. The bounce from the first quarter was much greater … Continue reading

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This is not 1994’s bond market, so don’t expect 1994’s crash

On Monday, The Wall Street Journal published yet another article that warned us not to forget how badly bond investors got burned when the Federal Reserve (Fed) raised the federal funds rate in 1994. According to this article, there are … Continue reading

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There’s one missing ingredient in this economic recovery: Housing

A strong pace of housing activity remains the missing ingredient in this cyclical expansion. Housing activity, as measured by housing starts, has led the economy into recessions and then has rebounded strongly to lead the cyclical recovery. Five years into … Continue reading

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Real and imaginary inflation

The Consumer Price Index (CPI) for June increased 0.3% from May, mainly driven higher by rising gasoline prices. Over the past 12 months, the CPI has increased 2.1%. Don’t worry; the Federal Reserve (Fed) isn’t going to imminently increase rates. … Continue reading

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Geopolitics weigh on sentiment

On Thursday, a Malaysian airliner was downed over Ukraine; Russian separatists were blamed. This was on the heels of increased sanctions imposed on Russian businesses by the U.S. and European countries. Russian stocks dropped and oil prices rose. Treasury yields … Continue reading

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Take this job and shove it?

The 1977 country song “Take This Job and Shove It” was a #1 hit. It’s interesting that a song about walking away from a job was such a hit when the unemployment rate was 6.8%. Maybe people were emboldened after … Continue reading

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Fireworks in the Employment Situation Report

Nonfarm payrolls expanded by 288,000 in June, while the unemployment rate dropped to 6.1%. Payrolls in April and May were revised higher by a net amount of 29,000. The average workweek remained at 34.5 hours for the fourth-straight month. Average … Continue reading

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Growth contrasts: With GDP lower than expected, look for growth where you can find it

U.S. gross domestic product (GDP) decreased 2.9% at an annualized pace in the first quarter, according to the third estimate of the Bureau of Economic Analysis. This is a bigger decline than the second estimate of 1.0% and worse than … Continue reading

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