By Alhambra Investment Partners
Recessionary ‘Feel’ Remains in Trade
I understand the idea behind trying to get exports to fit into the orthodox conventions about the dollar and global trade, even if I don’t agree with that at all, as it at least makes some plausible sense. If the dollar is up against trade partners, in simple math terms you might expect to see fewer US exports heading overseas – the currency translation makes our goods “more expensive.” But where that has at least a logical basis, there is none on the import side. If US goods are more expensive, then foreign goods are much cheaper, relatively, and thus with robust jobs and all that there should be a massive infusion of imports right now.
The opposite is, of course, the case, where imports continue to collapse in 2015. The resolution of the West Coast port strike, which is so often referenced in all this, amounted to a March increase of just 2.1% year-over-year. That followed February’s alarming 4.4% decline. But rather than all these cheapened imports and freely flowing ports opening up the spigot for burgeoning domestic demand, imports fell almost 6% in April! That was the worst month since March 2013 and the initial inflection off the 2012 global slowdown. If there is a robust US economy hiding in here, it is the most camouflaged in history.
Continue reading A Recessionary ‘Feel’…
Excerpted from the May 24 edition of Notes From the Rabbit Hole, NFTRH 344:
US Economy – Semi b2b Amps Up its Trend
A quick review for newer subscribers: In Q1 2013 we noted that the Semiconductor Equipment industry was in “ramp up” mode per a personal source in the industry. After that pivotal period, we have relied on the Semi Equipment ‘book-to-bill’ ratio as a monthly checkup on what is often an important economic leading indicator. The Canary chirped in 2013 and it is still singing a sweet song today.
For forward looking purposes we note that it is the bookings, not billings that matter.
The graphic is, as usual, from SEMI.org (w/ my mark ups) as is this quote…
Continue reading US Economy & Semi b2b
By Alhambra Investment Partners
The Smaller Economy Getting Smaller Still
Durable goods orders declined for the third consecutive month in April, meaning with January’s flat reading that new orders for this important segment of consumer “demand” has been consistently shrinking in all of 2015 so far. New orders for capital goods have been negative year-over-year in all four months. With the pace of shipments just now starting to decelerate, it would appear that without a surge in new orders very soon economic production will have to adjust much lower in the near future.
Continue reading The Smaller Economy…
By Tom McClellan
Consumer Sentiment Still Forecasts Employment Growth
May 15, 2015
The unemployment rate has not finished falling. That is the message from the data provided by the University of Michigan’s Survey of Consumers.
In this week’s chart, I am comparing an inverted plot of the US civilian unemployment rate to the UMich sentiment data. It makes complete sense that how consumers are feeling should have a strong positive correlation to the unemployment rate. In a recession, when more Americans are out of work, it would be natural for consumers to be bummed out. So to find a relationship between them is not much of a surprise.
Continue reading Consumer Sentiment Forecasts Employment