United States
U.S. Regains PMI-Manufacturing Lead From Europe
September 1, 2010
The U.S. minus euro area PMI differential in manufacturing swung to +1.2 in August from minus 1.2 in July. The spread had been negative in July for only the first time since December 2008, averaging +3.0 in that 18-month span and peaking in January 2010 at +6.0. The U.S. purchasing managers index rose 0.8 points, [...] More
Similar Canadian and U.S. Growth Trends
August 31, 2010
Canadian real GDP advanced 2.0% at a seasonally adjusted annualized rate (saar) in the second quarter and by 3.4% between 2Q09 and 2Q10. These results, announced earlier today, resemble U.S. trends. The compositions of Canadian and U.S. growth were less similar. In the comparative table below, “Cons” is an abbreviation for personal consumption, “Govt” stands [...] More
Japanese and U.S. Government Bond Yields
August 17, 2010
Japan provides a good example of what happens to long-term interest rates when very low inflation or outright deflation occur. The ten-year JGB yield has averaged 1.45% since the end of 1997. Such dropped below unity recently and is presently at 0.95%. The yield first plumbed below 1.0% in 1998 during the Asian debt crisis, [...] More
U.S. and Canadian Data Releases: Off the Track Observations
August 6, 2010
The U.S. unemployment rate has been 9.4% or greater for fifteen consecutive months, one-month short of the 16-month streak in which such occurred in 1982-3. The broader unemployment/underemployment/discouraged worker rate of 16.5% is much higher now than then, and that figures is most likely well under-stated at present. U.S. private employment went up just 51K [...] More
U.S. Economic Performance under Obama and Bush43
August 5, 2010
The most visited blog entry posted on Currency Thoughts was written August 19, 2008 and entitled How the U.S. Economy Performed Under Democrat and Republican Presidencies. That article considered five criteria: 1) the dollar against the D-mark and/or euro, 2) change in the Dow Jones Industrial Average, 3) real GDP growth, 4) employment growth, and [...] More
Raising Very Low Central Bank Rates Easier Said Than Done
July 15, 2010
Having followed Bank of Japan policymaking since before Japan’s financial crisis, I was suspicious when consensus forecasts surfaced several months ago that the Fed funds rate would rise later this year. I’m even doubtful about 2011. A U.S. recovery had begun after mid-2009, and GDP growth accelerated to a 5.6% annualized pace in 4Q09 and [...] More
U.S.-Euro Area PMI Spread in Manufacturing Collapses
July 1, 2010
The point differential between the U.S. and euro area factory purchasing manager indices narrowed 3.6 points to +0.6 in June, the least U.S.-advantageous spread since December 2008. Sooner or later, the euro’s downtrend against the dollar was bound to impact the two economies’ relative standing in manufacturing, where currency swings can produce huge shifts in [...] More
More Evidence of a North American Slowdown
June 30, 2010
According to the ADP estimate, private employment increased just 13K in June, about a fifth as much as expected. The measly rise in June was the smallest since a 3K uptick in February and compares to 51K per month in March-May. The data bode poorly for Friday’s Labor Department monthly survey. According to the latter, [...] More
How the First-Quarter U.S. Current Account Deficit Was Funded
June 17, 2010
The Commerce Department release of quarterly U.S. international transactions, the most comprehensive snapshot of the balance of payments, contains several pieces of dollar-supporting news. The current account deficit, $109.0 billion, was about $10 billion smaller than expected. That sum was equal to 3.0% of GDP, similar to ratios of 2.8% in the prior quarter and [...] More
Canada and United States Release Several Indicators: Highlights
June 15, 2010
Foreigners on net bought over $100 billion of long-term U.S. securities for a second straight month in April. The two-month average, $134.2 billion, compares very favorably with $43.8 billion per month in January-February, $53.3 billion per month in 2009 and $34.3 billion per month in 2008 and even exceeded the pace of $83.4 billion in [...] More
