Deeper Analysis

FOMC Statement and Updated Forecasts

September 16, 2020

I had two quick takeaways from today’s FOMC statement. First, Under the modified FOMC framework for treating its twin policy mandates, forward guidance is expressed in an enlarged paragraph: The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longerrun […] More

Recent See-Saw Pattern in Spread between U.S. and Euroland Manufacturing PMIs

September 1, 2020

The ISM-compiled U.S. manufacturing purchasing managers index rose 1.8 index points to a 19-month high of 56.0 in August and easily beat analyst expectations. Euroland’s IHS-compiled manufacturing PMI, by contrast, dipped 0.1 point to a 2-month low of 51.7. The spread between those two data series thus shifted 1.9 points more advantageously toward the United […] More

August 2020 in Figures

August 31, 2020

Financial markets in August experienced significant increases in share prices and 10-year sovereign debt yields and a pronounced further decline in the dollar’s external value. Central bank policy interest rates again held steady in the U.K., U.K., Switzerland, euro area and Japan but were lowered in several developing economy countries such as Mexico by 50 […] More

Comment on U.S. Presidential Election Results and Economic Growth

August 27, 2020

In this year’s bid for a second term, President Trump is taking credit for better U.S. economic growth than his predecessors were able to achieve at least over the first three years prior to the pandemic. For this note, I examined real GDP in the Trump Presidency and compared such to the first terms of […] More

Euroland at a Glance and As a Foil Against Which to Assess the State of America

August 13, 2020

The Covid-19 pandemic presents enormous and similar challenges to most nations. 2020 is an especially critical year for the United States because it coincides with a presidential election that presents very different visions on the country’s future. We look at Europe, because the Democratic Party agenda would move the United States closer to the European […] More

U.S. and Euro Area Manufacturing Conditions Improved Last Month

August 3, 2020

The U.S. manufacturing purchasing managers index of the Institute for Supply Management rose 1.6 points to a 16-month high of 54.2 in July. That performance was exceeded nonetheless by the IHS-compiled PMI for Euroland, which jumped 4.4 points to 51.8. Being each above 50, the data signify a faster U.S. improvement in business conditions during […] More

July 2020 in Figures

August 1, 2020

July was the weakest month for the dollar in practically ten years. The resulting improvement in U.S. price competitiveness resulted large U.S. equity price advances that were not experienced by European and Japanese stock markets. Dollar vulnerability also generated strong demand for gold, whose price soared nearly 10%. Late in the month gold briefly surpassed […] More

U.S. Growth in Real GDP and Jobs in the Trump Era

July 30, 2020

Real GDP contracted 32.9% at an annualized rate (AR) last quarter, more than six times faster than during the prior quarter. Personal consumption, which accounts for roughly 70% of U.S. aggregate demand, plunged 34.6% annualized. Non-residential and residential business investment sank by 27.0% and 38.7%, respectively, and exports and imports plummeted 64.1% and 53.4%. These […] More

The 52 million U.S. Employment Hole

July 14, 2020

By coincidence, the growth of nonfarm payroll employment between end-1979 and end-1989 almost exactly matched that which occurred between end-1989 and end-1999 (a.k.a. Y2K). Over that entire last fifth of the 20th century, U.S. jobs expanded at a 1.84% per annum rate, and in this first pandemic year of 2020, we are another score of […] More

Bigger Spread in June Between U.S. and Euroland’s Manufacturing Purchasing Managers Indices

July 1, 2020

The ISM-compiled U.S. purchasing managers index (52.6) and the IHS-compiled Euroland PMI of 47.4 both rose to four-month highs in June. The U.S. index increased 9.5 points, 1.5 points more than did the Ezone PMI, and there was an additional significant attribute to the U.S. widening advantage last month. At 47.4, conditions in Euroland manufacturing […] More