Deeper Analysis

Only a Slight U.S. Factory Sector Advantage Versus Euroland

November 4, 2019

The ISM-compiled U.S. manufacturing purchasing managers index in October rose 0.5 index points to a 2-month high of 48.3, and Euroland’s IHS-compiled PMI edged 0.2 points higher to 45.9, which also represents a 2-month high. The differential between those two data series of 2.4 points in favor of the United States was similar to the […] More

Manufacturing Around the World as Depicted by October Purchasing Manager Surveys

November 2, 2019

The soft data provided by various and sundry purchasing manager surveys reported each month provide an early sign of economic conditions whose signals may or may not be confirmed by subsequent hard data. Although manufacturing covers a comparatively small piece of total activity, the other parts are dependent upon the health of manufacturing such that […] More

October in Figures

October 31, 2019

The intensification of risk related to U.S.-Sino trade talks and Brexit that happened in September receded partly in October. Monthend came and went without the U.K. leaving the EU either with or without a deal, and sufficient progress in the trade talks forestalled the threat of sharp tariff increases at least for a while. Impeachment […] More

Fed’s Pause to Last Longer Than Average

October 30, 2019

Coming into today’s FOMC announcement and press conference, Fed watchers correctly coalesced around a view that the Fed would chop 25 basis points off its federal funds rate target for the third time since July 31 but at the same time signal a pause in this easing cycle. The released statement didn’t discredit that presumption. […] More

Manufacturing Recession on Both Sides of the Atlantic

October 1, 2019

The manufacturing sector is very sensitive to the strength of export demand. Consequently, the trends of the U.S. and euro area manufacturing purchasing manager indices provides good empirical evidence to test President Trump’s oft-repeated assertion that the United States will win a trade war and incur minimal collateral damage along the way. Euroland’s IHS-compiled PMI […] More

September and the Third Quarter in Figures

September 30, 2019

A well-bid dollar in the third quarter correlated with lesser gains in U.S. equity prices than in the stock markets of Germany and Japan. Despite intensifying White House complaints that the Fed isn’t cutting U.S. interest rates enough, two reductions of the federal funds target were engineered in the quarter totaling 50 basis points. In […] More

Impeachment and the U.S. Stock Market: Historical Precedents

September 24, 2019

A decline today in U.S. share prices has been attributed in part to a rising perceived risk that impeachment proceedings will be brought against President Trump. In the flexible dollar rate era, only two presidential impeachment events have occurred, and the performance of the U.S. stock market in those two examples could hardly be more […] More

Takeaways from Jerome Powell’s Press Conference

September 18, 2019

Fed Chairman Powell didn’t say anything particularly surprising at today’s press conference. His answers to a wide rage of questions, some on awkward topics like the one-directional abusive criticism of the Fed coming from the White House, were predictable on several levels. His comments adhered to long-established Fed stances such as the data dependency of […] More

Comment about the ISM’s U.S. PMI for Non-Manufacturing

September 5, 2019

U.S. share prices were thrust sharply higher today, initially by news that Chinese officials are coming to Washington to resume trade talks, but again later as investors reacted to released U.S. data. U.S. labor productivity and unit labor costs increased robustly last quarter by 2.3% and 2.6% at annualized quarter-on-quarter comparisons. Factory orders advanced 1.4% […] More

August PMI Data Seemingly Discredits the View that the U.S. Will Win a Trade War and Incur Minimal Collateral Damage

September 3, 2019

The Institute of Supply Management’s monthly reading of the U.S. manufacturing purchasing managers index slipped below the 50 level for the first time in 43 months, signifying that the sector is no longer merely expanding more slowly but in fact has begun to outright deteriorate. The survey’s diffusion index for orders, which are sensitive to […] More