Deeper Analysis
Japanese Sales Tax Hike Hammered Economic Growth Last Quarter
February 17, 2020
The Japanese economy again contracted sharply after a hike in the national sales tax. This is a phenomenon with lots of history. A 3% sales tax was introduced initially in April 1989. Back then, Japan was viewed like China is currently — an up-and-coming economic rival that could soon overtake the United States. The sales […] More
January 2020 in Figures
January 31, 2020
The month of January presents another recent example of a time when key dollar pairs against the euro, yen, Swiss franc or sterling hardly moved on balance even as other financial markets underwent big changes. It was a month subjected to big distortions toward the end in the face of China’s rapidly spreading health crisis. […] More
Comment on U.S. GDP Last Quarter
January 30, 2020
The first estimate of U.S. real GDP growth in the final quarter of 2019 of 2.1% annualized compared to the third-quarter level matches quarterly growth last summer and marks the third straight quarter with growth at or very close to 2.0%. Fourth quarter-over-4Q growth was 2.3%. Calendar 2019 average growth equaled 2.3% as well, lowest […] More
Treasury Dept. Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States
January 14, 2020
China had been designated as a “currency manipulator” last August, but that label is being rescinded on the eve of the Phase One U.S.-Sino trade pact. In theory, retaliatory actions can be more speedily imposed by the President on so-called currency manipulators, but the switch in designation in reality will make little practical difference. In […] More
Closest Convergence of U.S. and Euroland Manufacturing Sectors Since January 2018
January 3, 2020
In the ISM report, a 5.9-point drop in production resulted in the weakest U.S. PMI reading (47.2) since June 2009. The components for orders of 46.8 and jobs of 45.1 were 0.4 and 1.5 points below their November results. The IHS survey of U.S. manufacturing also resulted in a lower PMI reading last month than […] More
December and 2019 in Figures
January 2, 2020
Equities performed spectacularly in 2019 as a whole and rose in December, too. Ten-year sovereign debt yields rose in December but fell in 2019. Three 25-basis point cuts were made in the federal funds target last year, reversing all by one of the four hikes done in 2018. Elsewhere, there was only a 10-basis point […] More
Comment on FOMC Statement, Forecasts, and Powell Press Conference
December 11, 2019
The Federal Open Market Committee left the federal funds target unchanged at 1.25-1.50% and reached that decision unanimously. A policy change was not expected, and there was nothing meaningfully new presented in the formal statement released today. Likewise, the updated forecasts included nothing remarkable. Projected GDP growth of 2.0% next year, 1.9% in 2021 and […] More
A Lessening U.S. Advantage Versus Euroland in Manufacturing
December 2, 2019
The ISM-compiled U.S. manufacturing purchasing managers index in October slid 0.2 index points to a 3-month low of 48.1, whereas the Euroland’s IHS-compiled PMI advanced a full point to a 3-month high of 46.9. The differential between those two data series of 1.2 points in favor of the United States was sliced in half to […] More
November 2019 in Figures
December 2, 2019
Share prices and 10-year sovereign debt yields climbed last month in most of the economies featured below. The dollar strengthened between 0.9% and 1.9% relative to the euro, yen, Swiss franc, loonie and Australian dollar but ended November with minimal net change against the kiwi, yuan or sterling. Central bank policy rates were not changed […] More
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
